IMAGE: MARKUS HEIN / PIXELIO.DE
Retail

SHOPPING CENTERS IN EUROPE – 50 YEARS OF CHANGE?

Shopping malls – in the form of bazaars or antique market halls – have been around for almost 2,000 years. It took until 1956, however, for the first “modern” integrated shopping mall (under one roof) to be opened – the Southdale Center in Minneapolis (USA).

BY JÖRG F. BITZER

In Europe, many take the opening of the Main-Taunus-Center (close to Frankfurt, Germany) in 1964 as the beginning of the history of modern shopping centers on this continent.

Some department stores, like Breuningerland in Stuttgart, Germany, have developed into very successful shopping malls in the meantime. These have often been around for well over 100 years. Excluding these, however, we may consider the year 2014 as the 50th anniversary of modern shopping malls in continental Europe.

From a retailer’s standpoint, it is unsurprising that the major factor that has always dominated modern retail has not changed at all: In shopping malls as everywhere else, it is about location, location, location, whether it is proximity to an entrance, adjacency to an anchor tenant, the distance to the closest elevator and/or escalator, or the distance to the nearest parking opportunity. The location within a mall remains a critical factor for success.

Two other factors that are just as important now as they were five decades ago, for shopping centers and high-street locations alike, are the shop frontage and the compromise that is almost always necessary between landlords’ uniform requirements for outside presentation and tenants’ understandable wish for corporate identity and identical brand recognition worldwide.

What clearly has changed over the past 50 years is what retailers now require from shopping center owners and operators. Providing accessibility, security, climate comfort, and an attractive environment are still absolute necessities, but they are clearly no longer sufficient to operate successfully.

Today’s retail tenants demand defined strategies for tenant mix, marketing strategies, differentiation criteria, and concepts for spending time within the mall without the immediate necessity to shop (such as sophisticated leisure activities, inviting gastronomy concepts, outstanding event planning, and extraordinary brand attractiveness). With the number of shopping centers still increasing in almost every European country, competition for customers remains fierce, to say the least. It can only be won if all operating concepts remain fresh and updated to match consumer demands that change almost daily.

On top of this come the requirements for online retail and further changes to retail concepts that apply not just to stores, but also to whole shopping centers. This forms an additional challenge for shopping centers from a retailer’s point of view. When a store is no longer primarily a shopping opportunity but becomes a pick-up point or a location for brand presentation, the old models of rental contracts (based upon turnover and in store-sales) become outdated as well. When the topics “visitor-based rents” and “entrance fees for successful entertainment/shopping malls” were mentioned at the ICSC world conference two years ago, many smiled, thinking this was all still a long way off. Today, less than 24 months later, the first concept is already finding an increasing number of willing parties trying to incorporate such structures into their lease contracts.

The retail business will continue to change as much in the future as it has in the past. Serving its clients remains the retailers’ top priority. The main requirement for shopping malls will be to do the same for the retailers, viewing them as THEIR customers!

OpinionAt

What is your opinion on this topic? Discuss it with us! Send your opinion to opinion@across-magazine.com !

 

Sign up for our ACROSS Newsletter. Subscribe to ACROSS Magazine.

Retail MORE

Going Forward! Europe’s food retail sector in the corona-year 2020: the storm of the century

Europe's food retailers are being put to the test by the eco- nomic consequences of the natural disaster Covid-19. This is a very special kind of weather situation. While non-food retailers and the food service industry are in sheer despair in the face of the calm caused by government-imposed lockdowns, the "system-relevant" food retail sector has been confronted with a veritable storm tide since the sec- ond quarter of 2020.

Food retailers in their own words

Industry leaders told us about the sales impact Corona had on their business in 2020. They also explain what fundamental changes in location, sales, and marketing strategy they are planning for 2021/2022 in response to the widespread economic impact of the pandemic.

Allowing young talents to completely rethink retail

Union Investment and Sierra Germany launched their latest edition of First Store by Alexa–a campaign by Berlin’s well-known shopping center Alexa. Ralf Schaffuss, Head of Retail Asset Management of owner Union Investment Real Estate, and Jens Horeis, General Manager of Center Management company Sierra Germany, talk about their latest innovation of the competition.

A closer look at Belgian retail parks

Retail parks have been the best performing and most resilient retail format in Belgium prior to and throughout the Covid-19 pandemic, resulting in a slight compression in yields by 25bps since the beginning of the year according to new research by CBRE commissioned by Mitiska REIM.

25 new brands came to the Czech market in 2020

Despite the coronavirus crisis, this is one brand more than 2019, according to a market survey by Cushman & Wakefield.

“There is no Playbook for this Situation”

The most difficult part of business is making decisions during a crisis, explains Walter Seib, CEO of HMSHost International, with regard to the Covid-19 pandemic. He believes that as countries open up and vaccines become available, people will travel and return to airport F&B.