Over the past 4 years there has been a 6% nationwide increase in the amount of shopping center space filled by tenants in recreation or entertainment.
Most but not all of this increase has come from movie theaters. In Chicago alone the variety of entertainment offerings is impressive and, some say, indicative of one-way brick and mortar stores and shopping malls are fighting back against e-commerce.
Comedy And More
Woodfield Mall in Schaumburg, IL features a comedy club, playground, art gallery, nail salon and a Pac-Man-themed restaurant complete with arcade games.
The most famous example, Mall of America in Bloomington, MN, is the largest indoor amusement park in the U.S. Plus there are stores.
There’s even a name for the attractions part of the mall – Family Entertainment Center (FEC). A White Hutchison white paper found that 75% of customers who visited such malls also visited the FEC. More importantly, 25% of customers who came primarily for the FEC also shopped.
Destination - Mall
The idea is to create additional traffic and provide a one-stop shop for families where non-shoppers have plenty to keep them busy giving the buyers in the family time to hit all their favorite stores and not feel rushed.
The move also gives mall owners tenants – albeit less desirable lower rent tenants – to replace stores owned by the likes of Sears Holdings Corp. (NASDAQ:SHLDF), Macy’s Inc. (NYSE:MC) and Ralph Lauren Corp. (NYSE:RLC), to name a few that have moved out.
Holiday Season Shopping Predictions
Whether these efforts are part of the reason or not, the International Council of Shopping Centers expects Americans to spend 3.3% more at physical stores this coming holiday season. The gain last year was 2.2%.
The average amount people expect to spend is $683.90 leading ICSC president, Tom McGee to say, “We continue to see positive consumer spending intentions ahead of the holiday season.” said Tom McGee, the group’s president.
Other Reasons To Hoof It
Shopping mall entertainment options may be more icing on the cake than anything else but with people spending more time and money online, the move likely won’t hurt.
Meanwhile, according to the ICSC, shoppers said the ability to try on clothing, return items easily and avoid shipping costs were all reasons they planned to shop in stores over the holidays.
Shopping Center REITs Worth Noting
If bricks and mortar stores are about to experience a resurgence, the news could be good for Shopping Center REITs.
Some of the bigger names in the space include: American Assets Trust Inc. (NYSE:AATC), Brixmor Property Group Inc. (NYSE:BRXC), DDR Corp. (NYSE:DDRC), Equity One Inc. (:EQYN/A), Federal Realty Investment Trust (NYSE:FRTC), Kimco Realty Corp. (NYSE:KIMD), Regency Centers Corp. (NYSE:REGC), Retail Opportunity Investments Corp. (NASDAQ:ROICC), Retail Properties of America Inc. (NYSE:RPAIC) and Weingarten Realty Investors (NYSE:WRIC)