Probably a small segment of the TRU consumer base will shift to independent retailers, but not a significant number. TRU is about volume, discounting, the toy supermarket. People aren't going there for the quality of the experience, as they would to an independent toy retailer. Walmart and Target are best positioned to be able to step in, if they want to. Grocery stores, I can't see it at all, except for the companies like Kroger and HEB, which have formats that add GM goods to some of their stores (besides Fred Meyer, Kroger has the Marketplace format, and HEB has something similar). I suppose if Giant-Eagle can link up with ACE Hardware, someone could create a toy store equivalent.
Agreed. Point #1: People eat every day. They don't buy other retail goods every day. So just like various general merchandise stores added food (Target, Walmart, etc.), it makes sense for shopping districts to up their game and add food to promote shopping frequency.
This article is weakened by not including examples from the West Coast, although since they opened awhile ago, the articles aren't current unlike the other cites. Orange County, California has a number of food halls, integrated with specialty retail. OC Mix for example is one such. I guess you'd call it an example of what the Philadelphia Inquirer recently termed "lifestyling" (a newer iteration of lifestyle centers). Anyway it rocks, although sadly the specialty food service equipment store on the site closed a year or two ago.
Shops renamed as The OC MixTRADE, an open air Irvine food hall, celebrates its grand opening SaturdaySanta Ana’s 4th Street Market: Food hall guide and tips on must-try dishes
In short, this will be an upscale retail + food initiative. Food halls aren't likely to have much traction in underperforming retail assets, although can be used to reposition underperforming retail assets that are located in strong real estate markets. OC Mix is one example of the latter.
Point #2: big shopping centers have never been great at selling groceries. This has been the case for decades. So that means these operations will tend towards prepared foods with a smattering of specialty items in little markets that people can take home at the end of their meal. They won't be buying much in the way of frozen items, etc.
Yep, it's different in Europe because they take sustainability much more seriously. The likelihood of the US forcing changes towards electric cars -- like significantly increasing gasoline excises taxes, which in Europe are between $4 and $5 per gallon -- is unlikely here. Were that to change, then choices people make about fuel sources for their cars would change.
Most commercial property owners expect retailers to pay for the privilege of activating their space, but that is changing some. And some larger companies are even becoming more hospitable to independents, recognizing that uniqueness is valuable. The Philadelphia Inquirer had an article on this topic recently which was quite interesting, "How Bryn Mawr Village found its Main Line shopping niche."
Boulder's advantage is that it is a college town. Burlington VT and Charlottesville VA also have similar, reasonably successful downtown malls. They have lots of residents proximate and many of them don't drive. But at the same time, Boulder is a great example because they don't leave stuff to change. The mall is very much managed.
This article from the 12/20/2005 issue of the Longmont CO Times-Call is quite instructive: "Still one-of-a-kind: Pearl Street Mall remains jewel in Boulder’s crown" but you'll have to access it from your local library's article database.
DC charges 5x the normal rate for vacant properties, but it's easy to get around it if you are a commercial property owner, just put up a for lease sign, but blow off all the queries. Other cities, like Toronto, stupidly reduce rates for empty properties, instead of charging more.
True. I forgot to mention that the Urban Land Institute is very active in this space. These reports, dating up to 15 years or longer, are still very much relevant:
Ten Steps for Developing Successful Town Centers
Ten Steps for Rebuilding Neighborhood Retail
Ten Steps for Rethinking the Mall
Reinventing Suburban Business Districts
Reinventing America's Suburban Strips
These days, the idea of cross-selling is very difficult in practice. People either shop or eat or go to an attraction and eat. They don't usually eat and shop or shop and go to an attraction, other than a museum gift shop.
I wish this were that simple. I used to believe that department stores especially were a "technology" that still had relevance to urban centers. Now I am less certain. Most chain companies -- and that includes department stores -- aren't mentally situated to participate as leaders in local commercial district revitalization efforts. Companies like May especially shut down their city stores, even when they were successful, without regard to local sales, but because of various corporate mandates and policies.
Business improvement districts generally do a decent enough job "wrangling" the various stakeholders, but it's hard. As a former commercial district revitalization manager, I actually hated working with merchants. They generally were small minded, and thought they knew everything about marketing and developing "a district." The property owners weren't much better. Herding cats is not easy. Independent retailers are independent for a reason, and planograms were invented for chain stores so that they could hire people who didn't have to be able to think and be creative.
In bigger districts this is less of an issue, but BIDs there tend to be very much property owner focused, which creates other tensions. In any case, tons has been written about this, there is the International Downtown Assn. and the National Main Street Center which work with BIDs and Main Street groups, etc.
The other problem is that local retail is bifurcating to convenience retail, mostly lower priced, and specialty retail. Traditional districts are more about specialty retail and knowledge based convenience (like hardware). It's tough for boutique retail to make it in those districts, which are now focusing on food, at least in strong markets.
The problems in NYC are common in strong markets. The way commercial property is valued is higher than the space is worth from the standpoint of actually selling goods. Plus the impact of e-commerce, discounting, etc. In such situations, I recommend the creation of a community development corporation specializing in owning or master leasing retail space and renting it to great stores. The only example I know of this is SEMAEST in Paris. They control more than 700,000 s.f. and have helped more than 700 businesses. In the districts they work in, they've had significant impact on reducing vacancy rates.
Someone will make a million bucks if they can figure out how to make produce shelves look attractive when all the produce is bagged and remains in boxes. That look detracts from the Aldi investments, but the lower prices make up for it.
The question seems kind of pedantic. There's a difference in experience between a Save-A-Lot and a regular grocery store. A higher income shopper wouldn't be caught dead in a Save-A-Lot, and is probably less likely to shop in an old-style Aldi.
While Aldi's previous store iterations were a step above Save-A-Lot, they weren't of a sort to more widely appeal to higher income demographics. The new stores aren't particularly amazing, but the assortment is changing and more higher quality items are being carried. At a neighborhood party last weekend someone was raving over Aldi's organic coffee, and recently we tried their salmon (not terribly cheap at $8/lb.) and it was excellent. They recently opened a store in an area with higher income demographics in nearby Montgomery County, Maryland, whereas their other stores in the area are in lower income areas, and it seems to be pretty busy, which proves, as Herbert Haft once said to me "In my experience, the people who want to save the most money are the people with money already."
The other thing is that I think that the upgrades are also a shot at Lidl. I think Lidl is going to end up having a hard time developing a strong showing in the U.S. -- not because they don't have something to offer, but because their competitors, especially Aldi, aren't going to take it lying down. With Aldi, it means a wider arrange of products at better quality. E.g., years ago, we tried their tortillas and they were terrible, we said never again. But recently they upgraded, and we are happy to buy them, especially at a price more than 50 percent cheaper than the Mission brand equivalent. Constant improvement will make them tough to beat.