Quote:
Originally Posted by HillStreetBlues
...Snark's comment earlier is chilling to me. I've expected that we'd have to one day have these big box stores pulled down (the other day, I saw a months-vacant former Target store and wondered what might become of it), but it's hard to imagine what (presumably even more wasteful) model might displace these big box stores.
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The concern is that there will be very low value retailers, or
nothing to inhabit these facilities. The low value aspect is already happening: I've seen a one-time Future Shop replaced by Goodwill Industries for example.
Example: Some big-box outfits, such as Costco and Walmart will likely be around a for long time, as their retail facilities are simply the end node in a complex vertically integrated cradle-to-grave business process. However the mid-sized outfits that are little more than simple retail facilities to dump massive amounts of cheap product such as American Apparel or Old Navy's days are numbered. American Apparel, which is famous for it's slutwear for teens and tweens has already filed for bankruptcy in spite of the fact that it was a very hot item not that many years ago. Old Navy moves disposable, low quality, mass produced clothing. Such products are now being pushed
hard by internet retailers. I saw one web site the other day advertising wedding dresses for $20 (!) If such an internet retail model is successful, it will drive retailers such as exemplified above (and there are many more) out of business or force them to be internet retailers themselves. Such retailers typically account for leasing at least half of the retail space in a big-box complex.
Another emerging phenomenon is the concept of the internet sales storefront for items that are too large or complex to be purchased online and shipped directly to home. I know that a lot of positive noise is being made about IKEA coming to London, K-W, St.Catherine's, etc. The idea is that for some reason if your city has an IKEA store, you've made it to the big leagues. The problem is that these aren't IKEA stores (at least not the traditional types). They are modern versions of the cash and carry pickup outlet, with the added angle of ordering most of their product online ahead of time. I'll proposition that if this model is successful, there will
never be a full-sized IKEA store is any of these communities. What's more, other conventional retailers will follow suit - reducing their big-box facility to a glorified pickup window, with just-in-time shipping reducing the requirement for warehouse stocking to a minimum. In short, those who do stick around and use this retail model will be wanting a fraction of the space that they would use under the current retail model.
In summary, the big players such as Walmart will likley remain for the foreseeable future. However, although it will take time and won't happen overnight, a lot of the current big-box tenants will not be around in 10 or 20 years because for those retailers, the business model will have vanished. Since the business model will be gone, what replaces those tenants will likely be low-end retailers who come and go with regularity (that can already be seen in dollar stores and the seasonal "Halloween stores"). Those more solid retailers who remain will require much less space if they follow the internet sales storefront retail model. The end result: vast stretches of underutilized or unused warehouse-type buildings surrounded by acres and acres of underutilized or unused parking lot. Urban decay.
So, what would eventually fill in the spaces that one day will be occupied by these empty or underutilized big-box complexes? Well, these buildings are meant to be disposable and easily disassembled, so the physical buildings may eventually disappear. There is economic motivation for this: for example the Chinese are always looking for us to sell them our scrap steel at good prices (ironically for uses such as building things like aircraft carriers that will eventually be used to project power against us). Perhaps residential infill might eventually re-purpose the space - as is currently being proposed for the old McCormick's lands. Much like those old brownfield lands however, there may be a long interregnum of years or even many decades between when these sites are abandoned and redeveloped. If one uses the McCormick's and surrounding lands as an example, the Kalvenater factory that was in that same area closed operations 50 years ago.
In closing, the real threat is that much these current big-box lands may well become the abandoned brownfields of the future.
At least the soil won't be contaminated.
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