Interview with Cedrik Lachance, Managing Director, Green Street Advisors.
Montesi: What is your view about retail formats in the future, and do you believe that hybrids are emerging?
Lachance: When you travel internationally, you see retail centers that integrate different types of shopping trips. You get daily and convenience shopping integrated with monthly or quarterly discretionary shopping. You see it in Europe and in Australia. Australia is a wonderful example where the main anchors of good quality malls are large grocers, which often but not always, co-exist with fashion department stores. Over time we’re going to see more blurring of the lines as to how you deliver goods to consumers and in what format.
In addition, a lot of people will think more and more creatively about how to fill vacant anchor space in malls. It’s given rise to Target, for instance, as an important retailer in the mall environment.
But, when I think about retailers finding the right avenue to distribute their products, it’s really about finding the right trade area. Whether it’s done in an enclosed mall, in street retail, or in a lifestyle center, the format is secondary to the trade area. That said, I do like how you guys refer to this evolving category of shopping centers as “experiential retail”. I think we’ll definitely see more mixing of basic goods and services with fashion, discretionary spending, and entertainment in the U.S. overtime.
I am intrigued, though, as to how long it might take to make grocery shopping successful in U.S. malls and, in general, how long it’s going to take to bring more daily convenience to the mall. Target has been a nice success there, but we haven’t seen a lot of true grocers going to the mall as of yet. You see the occasional Whole Foods or higher-end grocer, but it’s still something new to this country and the roll out could take quite some time.
Miller: Give us your perspective on current economic and demographic trend impacting the consumer – strips and malls?