Written by Gabriel Dillard
A global investment manager has painted a rosier picture for bricks-and-mortar retail in the U.S., but with a caveat: sell less stuff, more food.
That’s the verdict from QIC Global Real Estate, which maintains a $13 billion investment portfolio of around 50 commercial properties in Australia and the U.S.
Among the key findings of the paper, “Rhetoric vs reality: Quantifying the long-term outlook for U.S. mall sales,” is that department stores and stores selling electronics/appliances, sporting goods and books/music will lose 20 percent of their market share over the next decade.
At the same time stores selling food, beverages and other perishable goods, as well as stores selling health care products that require in-store services, will do better in that period.
“Consumers also prefer entertainment and personal services, fast-growing segments with low levels of e-commerce penetration,” according to a QIC news release.
The report stresses that malls must transform themselves into “social town centers” where people want to eat, meet friends, relax and be entertained.
QIC is bullish on that formula.
“The tenant mix of a genuine town center can more than double sales growth of a mall that is currently operating with today’s typical tenant mix,” according to the release.
We’ve already seen this strategy employed at local shopping centers. Manchester Center is the prime example. It is currently undergoing a multi-million-dollar renovation that will include a food court with local eateries.
The Hanford Mall also made a splash when it was the location of the first Dunkin’ Donuts franchise in the Central Valley.
What are your thoughts? Do you think food and drink can transform America’s so-called “dead malls” into the 21st century town center?