Dead Malls of Canada

[ssiguy]

It will be very interesting to see what happens to all these big box stores and "power centres" in 20 or 30 years.

Many will think they are going no where but times are always changing. If you would have suggested to anyone in the 80s when malls were being built and expanded at a dizzying rate, that within 30 years most of them would have died you would have been committed. Even people who hated the malls would never have even imagined such a thing.

McDonald's restaurants sales per store are down dramatically all over NA. WalMart has closed dozens of relatively new smaller centres in the Southern US of all places and is closing most of it's Japanese and Braazilian stores Macy's & Norstrom's are closing stores across the US as is American Apparel to say nothing of Sears.

Also remember that most "power centres" rely on discretionary spending...........in other words, younger shoppers. The older people get the less likely they are to be concerned about the latest fashion, getting a new designer kitchen every 3 years, or tech gadget which is these big box stores bread & butter.

They are built in the outer areas where younger families tend to be just like the malls in the 80s. Well now those younger families around the malls in the 80s are retired and have no kids at home and hence the malls are dying. This is why malls have died in these area with the notable exception of their food stores, pharmacies, and other primary stores that people need for day to day living.

Well in 30 years all the housing around today's power centres with younger families and spoiled kids will be home to the newest crop of retirees and those stores offering every last tech gadget, newest kitchen attire, latest fashions, and "must have" bedroom linens will have no customers.

This is aided by the fact that more people are doing their shopping on-line and downtowns are seeing an incredible resurgence and by younger people who are appalled by their suburban upbringing.

Big box stores may seem like they are hear forever but they are just the newest take on the 80s malls and they too will see their death and it will be interesting to see what {if anything} takes their place.

[Innsertnamehere]

Power centres are on their way out.. the fad has come and gone. Market is saturated, the only new ones you will see are in high growth areas. Its amazing how fast they fell out of favor too, even in 2010 they were popping up like the plague across the Canadian landscape.

The buildings are typically designed for 40 year lifespans. After that, they will be "paid for" and have turned a profit for a decade or so. Power centres are cheaply built too, so they will come down like a house of cards when it comes for replacement, they aren't the sort of structures that are designed to be around in 50 years.

There are already trends of intensifying them, at least in Toronto. Lots of developers are either adding traditional retail space or sticking residential on top of the stores.

Personally I think you will continue to see neighborhood retail locating in the traditional steel and precast building behind a giant parking lot.. but even then that is changing to a certian extent, with urban design guidelines forcing them to front the street with parking in behind.

Discretionary spending stores such as Theatres, clothing, etc. are more and more focused in high density "urban" development. Whether this means the rebuilt Don Mills Mall, Downtown Markham, or even a bit more traditional type of retail like the Toronto Premium Outlets which is essentially an open air mall. People want the atmosphere of a retail street, even if they still access it by car. I can see downtowns seeing major revivals, and for areas without traditional downtowns, seeing new high density areas crop up with heavy retail focuses, such as Vaughan Centre, Downtown Markham, etc.

[Loco101]

Originally Posted by vid

The parking lot at Thunder Bay's Superstore is often completely full, I've had to park at a nearby A&W to get groceries on a few occasions now. They have significantly lower prices than the other grocery stores (everyone but Safeway is stocked out of Toronto warehouses, and it costs more to transport goods from Toronto than from Winnipeg but Metro doesn't have a western presence and Walmart's western warehouse is in Calgary) and guaranteed all lanes open on weekends. The place is a zoo.

And our main shopping mall has a much smaller parking lot than a mall it's side should have, so during Christmas shopping season the parking lot is at approximately 100% capacity and overflows onto parking lots across the street from the mall.

Thunder Bay's main Canadian Tire. Parking is so bad, I park at the strip malls across the street instead. Not that it lacks spaces, it has a lot of parking spaces. They're just being used up by storage trailers, because—haha, oops!—the building's warehouse is too small. And when they expanded the mall to the west (as indicated by the lighter roof on the left there), they didn't add any warehouse space at all. They just made the retail space bigger.



Our main shopping mall on a Saturday in April last year; the empty spot is, obviously, the former Target:



As you can see, the parking lot is nearly full. The back of the mall (near the rail line) doesn't have any actual entrances into the mall, either. Those are store employee parking spaces.

All lanes open at a store? That's something we don't see in Timmins because most large retailers aren't able to get enough employees. Walmart is the absolute worst for that. There are probably 20 checkout lanes but never more than 5 open during peak times. And often only the express ones are open so you have to go through them even when you have lots of items. It's crazy how long you sometimes have to wait in the long lines.

But we don't have parking issues anywhere when shopping in our city. Even before Christmas.

[Metro-One]

Originally Posted by ssiguy

It will be very interesting to see what happens to all these big box stores and "power centres" in 20 or 30 years.

Many will think they are going no where but times are always changing. If you would have suggested to anyone in the 80s when malls were being built and expanded at a dizzying rate, that within 30 years most of them would have died you would have been committed. Even people who hated the malls would never have even imagined such a thing.

McDonald's is closing nearly all it's restaurants in Japan and sales per store are down dramatically all over NA. WalMart has closed dozens of relatively new smaller centres in the Southern US of all places. Macy's & Norstrom's are closing stores across the US as is American Apparel to say nothing of Sears.

Also remember that most "power centres" rely on discretionary spending...........in other words, younger shoppers. The older people get the less likely they are to be concerned about the latest fashion, getting a new designer kitchen every 3 years, or tech gadget which is these big box stores bread & butter.

They are built in the outer areas where younger families tend to be just like the malls in the 80s. Well now those younger families around the malls in the 80s are retired and have no kids at home and hence the malls are dying. This is why malls have died in these area with the notable exception of their food stores, pharmacies, and other primary stores that people need for day to day living.

Well in 30 years all the housing around today's power centres with younger families and spoiled kids will be home to the newest crop of retirees and those stores offering every last tech gadget, newest kitchen attire, latest fashions, and "must have" bedroom linens will have no customers.

This is aided by the fact that more people are doing their shopping on-line and downtowns are seeing an incredible resurgence and by younger people who are appalled by their suburban upbringing.

Big box stores may seem like they are hear forever but they are just the newest take on the 80s malls and they too will see their death and it will be interesting to see what {if anything} takes their place.

Show me a source, I live in Japan and I have yet to see a single location in my prefecture close down. There are 4 in my area alone, and their advertising campaigns seem to be going as strong as ever (not really a good strategy if you have decided to vacate). In fact they just opened a new location 2 km away from me in a new retail development 3 months ago, and the place is packed with high school students and seniors.

It is true that sales have dropped in the last 2 years, but that was because of a perfect storm of various items found in chicken mcnuggets (coming from China at the time) and a leaked video of a Chinese factory mixing in old rotten meat into the mcnuggets. Since them Japan no longer imports chicken mcnuggets from China and I think sales have rebounded a little, but there is no mass shutdown that I have witnessed. In all honestly a few could close because they seem over saturated at the moment.

[miketoronto]

Originally Posted by ssiguy

It will be very interesting to see what happens to all these big box stores and "power centres" in 20 or 30 years.

Many will think they are going no where but times are always changing. If you would have suggested to anyone in the 80s when malls were being built and expanded at a dizzying rate, that within 30 years most of them would have died you would have been committed. Even people who hated the malls would never have even imagined such a thing.

That is really not true. Malls in Canada are more popular than ever, and consistently reinventing themselves. Scarborough Town Centre alone has seen a 40% sales productivity increase.
A few neighborhood malls have fallen on harder times as more people gravitate to the larger malls for more things. But malls are not dead, and are in fact expanding. And some could say the smaller dead malls are from an era of too much retail expansion that we could never have supported.

What we have to watch out for is over retailing Canada like the USA has done. Our good performance comes from not over building, and I see a little reason for concern, particularly in the Toronto area, were it looks like we are overbuilding the luxury retail a tad too much.

[eternallyme]

Originally Posted by miketoronto

That is really not true. Malls in Canada are more popular than ever, and consistently reinventing themselves. Scarborough Town Centre alone has seen a 40% sales productivity increase.
A few neighborhood malls have fallen on harder times as more people gravitate to the larger malls for more things. But malls are not dead, and are in fact expanding. And some could say the smaller dead malls are from an era of too much retail expansion that we could never have supported.

What we have to watch out for is over retailing Canada like the USA has done. Our good performance comes from not over building, and I see a little reason for concern, particularly in the Toronto area, were it looks like we are overbuilding the luxury retail a tad too much.

In the case of STC, there is largely no competition. The east end of the GTA (i.e. east of Highway 404) has few other malls that are performing well today, a region with a population over one million. Many malls in that region have fallen into the B or C tiers. A large part of it is demographics though, income levels are lower in the east end vs. in the west end.

[kwoldtimer]

Originally Posted by Metro-One

Show me a source, I live in Japan and I have yet to see a single location in my prefecture close down. There are 4 in my area alone, and their advertising campaigns seem to be going as strong as ever (not really a good strategy if you have decided to vacate). In fact they just opened a new location 2 km away from me in a new retail development 3 months ago, and the place is packed with high school students and seniors.

It is true that sales have dropped in the last 2 years, but that was because of a perfect storm of various items found in chicken mcnuggets (coming from China at the time) and a leaked video of a Chinese factory mixing in old rotten meat into the mcnuggets. Since them Japan no longer imports chicken mcnuggets from China and I think sales have rebounded a little, but there is no mass shutdown that I have witnessed. In all honestly a few could close because they seem over saturated at the moment.

From an AFP report dated 20Feb2016:

Market share in Japan slipped to 10.4 percent in 2014 from nearly 14 percent five years earlier, according to market research firm Euromonitor, putting the chain well behind ubiquitous convenience stores stocking a wide range of food, and Japanese quick-service chains.

McDonald's Japan last week reported an annual loss of 34.7 billion yen ($304 million), its second straight year in the red and the biggest shortfall since opening its first store in Tokyo's posh Ginza district in 1971.

"Undoubtedly, 2015 was the most challenging year we have faced in our 45-year history," Casanova said.

U.S.-based McDonald's is mulling the sale of some if its stake in the Japan unit, which has closed hundreds of its 3,000 locations and renovated others in recent years.

[ssiguy]

Thank you Metro-One for pointing that out and you are absolutely correct, McDonald's is not getting out of Japan but in Japan, like in NA, per-store sales are down.

I meant to say Japan and Brazil are closing most of their Walmart stores like many in the Southern US as announced in early 2016.

Thanks for pointing out my mistake.

[logan5]

Originally Posted by Metro-One

It is true that sales have dropped in the last 2 years, but that was because of a perfect storm of various items found in chicken mcnuggets (coming from China at the time) and a leaked video of a Chinese factory mixing in old rotten meat into the mcnuggets.

Oh man that made me bust out laughing.

[Metro-One]

Originally Posted by ssiguy

Thank you Metro-One for pointing that out and you are absolutely correct, McDonald's is not getting out of Japan but in Japan, like in NA, per-store sales are down.

I meant to say Japan and Brazil are closing most of their Walmart stores like many in the Southern US as announced in early 2016.

Thanks for pointing out my mistake.

To be honest they need to downsize, it was (and still is) crazy over saturated with locations.

And yes, the mcnugget story was pretty funny (and gross).

[Aylmer]

Originally Posted by Metro-One

It is true that sales have dropped in the last 2 years, but that was because of a perfect storm of various items found in chicken mcnuggets (coming from China at the time) and a leaked video of a Chinese factory mixing in old rotten meat into the mcnuggets.

I'm honestly just surprised that there's meat in there at all

[MonctonRad]

Originally Posted by eternallyme

In the case of STC, there is largely no competition. The east end of the GTA (i.e. east of Highway 404) has few other malls that are performing well today, a region with a population over one million. Many malls in that region have fallen into the B or C tiers.

Same thing in Moncton. There were winners and losers in the mall wars.

CF Champlain Place was the winner. It has a number of anchor stores (Wal Mart, Sears, Sobeys, Toys R Us, Cineplex, Chapters, Bass Pro Shops) and quite a few higher end tenants (Victoria's Secret, Eddie Bauer, Fossil, H&M, Swarovski etc) and is doing quite well as the main regional mall for NB & PEI. It is the only traditional mall left in Moncton. It has no competition.

Every other mall in the metro area was the loser though, including:

- Highfield Square - bulldozed with the site to become the new 9,000 seat downtown arena.
- Moncton Mall - rebranded as the Northwest Centre and extensively rebuilt as a power centre type strip development anchored by Canadian Tire, Sobeys, Marshals, Sports Chek etc.
- Riverview Mall - a "dead" mall filled with call centres.

The main takeaway is that the era of the neighbourhood mall is dead. There is still a place for the enclosed shopping centre in Canada however, but only the truly large regional malls will survive and thrive. The overall market therefore has contracted significantly, but the survivors will carry on and hopefully prosper.

[esquire]

^ I'd say that a similar phenomenon has occurred across the country...malls have moved in two separate directions with a small handful becoming the dominant centres in their markets, while most others have gone downmarket or have disappeared altogether.

Back in Winnipeg in the 80s, there were 6 very similar regional enclosed malls including the downtown department store area, along with 1 smaller but still significant mall (Grant Park). They all had similar mixes of retail with a lineup that included most of the big chains represented in Winnipeg.

These days we're really down to 2, maybe 3, major malls filled with top-flight tenants. CF Polo Park (the dominant one), St. Vital and maybe Kildonan Place. Others like Garden City and Grant Park are barely competitive, Unicity has been replaced by a power centre, and downtown retail has virtually disappeared.

It's kind of funny because you'd think in a climate like this people would be drawn to indoor malls... that was always given as the reason for the death of downtown retail, i.e. that people prefer to shop indoors. Yet power centres make it clear that people don't seem to have a problem traipsing from store to store outside when it's -30.

[holhm22]

Originally Posted by Metro-One

Show me a source, I live in Japan and I have yet to see a single location in my prefecture close down. There are 4 in my area alone, and their advertising campaigns seem to be going as strong as ever (not really a good strategy if you have decided to vacate). In fact they just opened a new location 2 km away from me in a new retail development 3 months ago, and the place is packed with high school students and seniors.

It is true that sales have dropped in the last 2 years, but that was because of a perfect storm of various items found in chicken mcnuggets (coming from China at the time) and a leaked video of a Chinese factory mixing in old rotten meat into the mcnuggets. Since them Japan no longer imports chicken mcnuggets from China and I think sales have rebounded a little, but there is no mass shutdown that I have witnessed. In all honestly a few could close because they seem over saturated at the moment.

Speaking of the mcnugget mess from China in 2014, I was in Hong Kong at the time, which used stock from that factory. They gave everyone who bought something from McDonald's a free Big Mac coupon, with different lettuce being used because there was also something wrong with the lettuce during that time. Ended up getting 3 of those Big Mac coupons from people that didn't want them.

[miketoronto]

Originally Posted by MonctonRad

Same thing in Moncton. There were winners and losers in the mall wars.

Every other mall in the metro area was the loser though, including:

- Highfield Square - bulldozed with the site to become the new 9,000 seat downtown arena.
- Moncton Mall - rebranded as the Northwest Centre and extensively rebuilt as a power centre type strip development anchored by Canadian Tire, Sobeys, Marshals, Sports Chek etc.
- Riverview Mall - a "dead" mall filled with call centres.

The main takeaway is that the era of the neighbourhood mall is dead. There is still a place for the enclosed shopping centre in Canada however, but only the truly large regional malls will survive and thrive.

I think the message is we overbuilt retail, but not to as high a degree as the Americans.

There is no reason Moncton ever needed that much retail, considering the population base. If you really want to get down to it, Moncton should really only have a downtown retail area, and does not need malls.
But that is a whole other story and would be too European for Canada.

Same goes with Winnipeg. Why would a region of only 780,000 to 800,000 meed as much retail as they do? It is just way too much and it is proving unsustainable.

[Taeolas]

Originally Posted by MonctonRad

Same thing in Moncton. There were winners and losers in the mall wars.

...

The main takeaway is that the era of the neighbourhood mall is dead. There is still a place for the enclosed shopping centre in Canada however, but only the truly large regional malls will survive and thrive. The overall market therefore has contracted significantly, but the survivors will carry on and hopefully prosper.

Fredericton is similar.

Regent Mall is the big winner, with all of the major mall retailers in it, and the big anchors (Walmart, SportsChek, Sears, TRU).

Fredericton Mall closed off the inside and went powercentre to become the Uptown Centre.

Brookside Mall is mostly call centre/government offices now.

KingsPlace is actually doing well for the most part; but it's a Downtown Mall, servicing the 9-5 M-F crowd.

[Metro-One]

Originally Posted by holhm22

Speaking of the mcnugget mess from China in 2014, I was in Hong Kong at the time, which used stock from that factory. They gave everyone who bought something from McDonald's a free Big Mac coupon, with different lettuce being used because there was also something wrong with the lettuce during that time. Ended up getting 3 of those Big Mac coupons from people that didn't want them.

Hahaha! That is one of the greatest stories I have heard on here. Around the same time there was another video from a Chinese noodle factory showing employees actually sleeping in mounds of noodles and packing them up off from the floor...

I think most people have pretty much forgotten about those now though. I still enjoy some mcnuggets every now and then

[WhipperSnapper]

Originally Posted by ssiguy

It will be very interesting to see what happens to all these big box stores and "power centres" in 20 or 30 years.

Many will think they are going no where but times are always changing. If you would have suggested to anyone in the 80s when malls were being built and expanded at a dizzying rate, that within 30 years most of them would have died you would have been committed. Even people who hated the malls would never have even imagined such a thing.

McDonald's restaurants sales per store are down dramatically all over NA. WalMart has closed dozens of relatively new smaller centres in the Southern US of all places and is closing most of it's Japanese and Braazilian stores Macy's & Norstrom's are closing stores across the US as is American Apparel to say nothing of Sears.

Also remember that most "power centres" rely on discretionary spending...........in other words, younger shoppers. The older people get the less likely they are to be concerned about the latest fashion, getting a new designer kitchen every 3 years, or tech gadget which is these big box stores bread & butter.

They are built in the outer areas where younger families tend to be just like the malls in the 80s. Well now those younger families around the malls in the 80s are retired and have no kids at home and hence the malls are dying. This is why malls have died in these area with the notable exception of their food stores, pharmacies, and other primary stores that people need for day to day living.

Well in 30 years all the housing around today's power centres with younger families and spoiled kids will be home to the newest crop of retirees and those stores offering every last tech gadget, newest kitchen attire, latest fashions, and "must have" bedroom linens will have no customers.

This is aided by the fact that more people are doing their shopping on-line and downtowns are seeing an incredible resurgence and by younger people who are appalled by their suburban upbringing.

Big box stores may seem like they are hear forever but they are just the newest take on the 80s malls and they too will see their death and it will be interesting to see what {if anything} takes their place.

Most of the smaller community focused malls built in the late 70s, early 80s never reached anywhere their potential in the GTA. Some where massive failures right from start. You already had redevelopment schemes by the end of the 1980s for a few them which didn't pan out due to the recession of the 90s. They lingered on as cheap power centres.

[WhipperSnapper]

Originally Posted by Innsertnamehere

Power centres are on their way out.. the fad has come and gone. Market is saturated, the only new ones you will see are in high growth areas. Its amazing how fast they fell out of favor too, even in 2010 they were popping up like the plague across the Canadian landscape.

The buildings are typically designed for 40 year lifespans. After that, they will be "paid for" and have turned a profit for a decade or so. Power centres are cheaply built too, so they will come down like a house of cards when it comes for replacement, they aren't the sort of structures that are designed to be around in 50 years.

There are already trends of intensifying them, at least in Toronto. Lots of developers are either adding traditional retail space or sticking residential on top of the stores.

Personally I think you will continue to see neighborhood retail locating in the traditional steel and precast building behind a giant parking lot.. but even then that is changing to a certian extent, with urban design guidelines forcing them to front the street with parking in behind.

Discretionary spending stores such as Theatres, clothing, etc. are more and more focused in high density "urban" development. Whether this means the rebuilt Don Mills Mall, Downtown Markham, or even a bit more traditional type of retail like the Toronto Premium Outlets which is essentially an open air mall. People want the atmosphere of a retail street, even if they still access it by car. I can see downtowns seeing major revivals, and for areas without traditional downtowns, seeing new high density areas crop up with heavy retail focuses, such as Vaughan Centre, Downtown Markham, etc.

Agree. The disposable box in a sea of surface parking has pretty much come and gone. Big Box has gone the way of multi-level open air malls surrounded by decked parking with seldom used street side entrances. Personally, I wouldn't call this an improvement as they basically function the same as earlier big box development buts come with a much heftier price tag. These are meant to last through multiple tenants.

[WhipperSnapper]

Originally Posted by eternallyme

In the case of STC, there is largely no competition. The east end of the GTA (i.e. east of Highway 404) has few other malls that are performing well today, a region with a population over one million. Many malls in that region have fallen into the B or C tiers. A large part of it is demographics though, income levels are lower in the east end vs. in the west end.

I'm not aware of any regional mall in the Toronto area that is struggling. Some are performing better than others. Afterall, you consistently have a few among the Top 10 performers in North America. I don't find STC particularly isolated from other regional malls either.