Thursday, March 16, 2017
For decades, department stores have anchored sprawling suburban malls, but now, as their business has languished, mall landlords are trying to attract another sort of tenant in their place: grocers.
“There has been a real acceleration of anchors closing their operations,” Mark Ordan, told the Washington Post. Ordan knows both sides of the equation as former chief executive of Fresh Fields and a former chief executive of a leading mall operator. “As traditional anchors leave, it’s an opportunity for both the mall owner and the supermarkets.”
Just last month, shares of mall real estate investment trusts dropped after J.C. Penney announced plans to close up to 140 stores this year. The mall-quake followed a spate of bad news in recent months from Macy’s and Sears, two traditional mall anchors who said they plan to close hundreds of underperforming stores.
Ordan said malls are great locations for big grocery stores because of their parking, the visibility and the large format they provide. “It makes it very attractive for the tenant,” he said.
It also suits the Millennial shopper, who prefers the efficiency that combines a visit to the mall with retrieving that week’s groceries.
The grocery store inhabiting the mall isn’t exactly new, but “it’s certainly an emerging trend,” said Tom McGee, chief executive of the International Council of Shopping Centers. “Part of it is convenience, the ability to do things in one location. Millennials value convenience.”
Kroger Co., the nation’s largest grocer with close to 4,000 locations, recently bought a former Macy’s space at Kingsdale Shopping Center in Upper Arlington, Ohio. At the Natick Mall in Massachusetts, according to a report in the Wall Street Journal, Wegmans Food Market is leasing 194,000 square feet of space vacated by J.C. Penney. And 365 by Whole Foods is set to open this year at College Mall in Bloomington, Ind., the report said.
Photo by Erica Basnicki, via Wikimedia Commons