Fall of the mega-mall

Posted On Friday, 06 October 2006 02:00 Published by
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IF RETAILERS AND property owners want to continue to attract shoppers, they need to offer an alternative to the air-conditioned concrete boxes that are still mushrooming on South Africa's retail landscape.

IF RETAILERS AND property owners want to continue to attract shoppers, they need to offer an alternative to the air-conditioned concrete boxes that are still mushrooming on South Africa's retail landscape. This sentiment was echoed by a number of speakers at the recently held annual congress of the SA Council of Shopping Centres (SACSC). The general view is that SA consumers are becoming bored with huge enclosed malls that generally tend to offer nothing new but only more of the same.

Retail trend spotter Cheryl Adamson says it's possible that consumers will increasingly reject enclosed malls with a move back to Eurocentric, pedestrian-type shopping. She says SA consumers are becoming increasingly demanding and discerning and are looking for retail environments that offer authentic, exclusive shopping and leisure experiences in a natural, open-air environment.

Lisa Blane, partner at KMH Architects, says that trend is already noticeable, with a growing shift away from enclosed malls towards so-called lifestyle centres, where the emphasis is on minimising inward-looking, artificial spaces and maximising outdoor spaces.

Blane says although the advent of enclosed shopping malls in the Eighties and Nineties led to the demise of High Street shopping, changing lifestyle trends will dictate that developers and architects reinvent the traditional, open-air shopping concept.

She says the trend is already evident in the United States, where only two new enclosed mega-malls were built in the past year while 160 lifestyle centres were under construction in the same period. Blane says the same trend is happening in China and India.

SA will no doubt follow suit, with new-generation "pedestrianised" centres - such as Willowbridge (Tyger Valley, Cape Town), Melrose Arch (Johannesburg) and soon-to-be opened World Wear (Fairland, Johannesburg) - setting a new trend in shopping centre design and product offering.

David Kneale, recently appointed CEO of discount retailer New Clicks, supports the notion that developers and landlords need to put more effort into designing consumer-friendly retail environments. Kneale says that many of SA's large shopping malls aren't easily navigable and don't encourage consumers to shop the length and breadth of the entire centre. He says that it will become increasingly critical for the success of retailers that landlords create centres that offer the right mix of destination and convenience shopping. "Bigger isn't necessarily better."

However, not everyone agrees that the advent of lifestyle or pedestrian-type shopping centres could see the mega-mall become obsolete. George Skinner, executive chairman of SACSC, says although there's a move away from enclosed malls - with a number of open-air centres now in the pipeline - SA simply doesn't have sufficient growth in affluent areas to support too many high-end lifestyle centres.

Skinner says that large, regional shopping centres will continue to lure the masses and are likely to entrench their position as the preferred shopping destination for the majority of SA's consumers.

Sisa Ngebulana, executive chairman of developer and property owner Billion Group, shares that view. He says the advent of shopping malls came about precisely because consumers no longer found it convenient to shop in a High Street environment.

Ngebulana says black consumers in particular aspire to shop in enclosed malls that offer them critical mass and comparative shopping that no High Street environment could ever match. He says mega-malls will grow and prosper, driven by the huge, untapped spending power of an ever-growing black middle class, which will continue to filter into SA's mainstream economy.

Ngebulana dismisses talk of SA being over-shopped in terms of large, regional malls. He argues that in Gauteng alone there's still opportunity for at least three regional shopping centres. He says people shouldn't forget that until recently only 4m of SA's 45m population were adequately serviced in terms of retail facilities, with plenty of catching up still to take place.

Victor Snyders, MD of retail property manager Greyhawke, says the question is not whether enclosed malls will survive but rather how existing centres should reposition themselves to adapt to changing demographics.

He says SA's unique demographic profile means that consumer patterns are continuously evolving. While large malls are no doubt losing traditional, upper income customers, Snyders agrees with Ngebulana that those shoppers are being replaced by middle-class blacks.

It therefore seems that for the foreseeable future SA mall owners will be sitting pretty, unlike their US counterparts who don't have new shoppers to fill the gap left by the rapid migration from malls.


Publisher: Finance Week
Source: Joan Muller

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