MALL SALES OUTSHINE DEPARTMENT STORES
As the traditional department stores lose their luster, their total contribution to regional mall sales diminishes. The chart below shows comparable same-store sales growth at regional malls and department stores. Of mall-based department stores, high-end retailers experienced the greatest growth with same-store sales at Saks Fifth Avenue and Neiman Marcus increasing 8 percent and 7 percent, respectively. However, mall-based specialty stores are the real stars with same-store sales growth at American Eagle increasing 32 percent and Abercrombie climbing 35 percent in February.
HOW IMPORTANT IS SERVICE?
When WSL Strategic Retail asked almost 1,150 shoppers if they would be willing to pay more to get good service for particular categories, the results indicated a desire for higher quality help on complex products. At the top of the list was electronics. Hair-care products was at the bottom: Only 19 percent cared about service. And only 20 percent would pay more for improved check-out services.
THE BIERI REPORT: DETROIT
Metropolitan Detroit continues to spread from its urban core. In prosperous Oakland County, Somerset Collection is a magnet for luxury and continues to add stronger tenants each year. Twelve Oaks Mall is a solid retail center from every perspective. Detroit's first lifestyle center, The Village of Rochester Hills, has been well accepted and is thriving. Great Lakes Crossing, the region's first version of a Mills-type center, enjoys great weekend traffic and continues to attract new full-price tenants adding to its off-price tenant mix. In rapidly growing Macomb County, Lakeside Mall is experiencing challenges caused in large part by changes in ownership over the past few years and plans for a competing new lifestyle center nearby. Some of the older malls throughout the Tri-County region, such as Tel-Twelve Mall, have been converted to non-mall environments. Probably headed in the same direction are Livonia Mall and Wonderland Mall. Southland, Westland, and Macomb malls continue to hold their own. Laurel Park Place in Livonia still performs well in the shadow of Novi's Twelve Oaks Mall. Overall, the Metro Detroit retail picture is very healthy, highlighted by downtown retail successes in the upscale suburbs of Birmingham and Grosse Pointe. Even downtown Detroit has shown some signs of life with new sports stadiums and new community areas — specifically Campus Martius Park. A fully refurbished Renaissance Center, now owned by General Motors Corp., attracts visitors for dining and events.
|Fairlane Town Center||A|
|Great Lakes Crossing||C+|
|Laurel Park Place||B-|
|Northland Shopping Center||D|
|Somerset Collection - North||A+|
|Somerset Collection - South||A|
|Summit Place Mall||D-|
|Twelve Oaks Mall||B+|
|Village of Rochester Hills||C|
|Westland Shopping Center||C|
The information presented for traffic estimates and regional malls is gained from a variety of sources used in developing the Bieri Market Reports. These sources are public and private, and may even include the developers themselves. When traffic counts are not available, grades are determined by reviewing sales of anchor stores and specialty tenants within a subject project, and then comparing those with like projects.
DRUGSTORE WARS: THEN THERE WERE THREE
Drugstore cap rates have dropped to nearly 7 percent as the cost of space has increased, according to a recent Marcus & Millichap Retail Research Report. Investor interest is high, what with rising revenue and aggressive expansion to serve an aging population. The three market leaders are growing “at a blistering pace,” according to the brokerage firm. CVS, which acquired the Eckerds chain last year from JC Penney, now operates about 5,400 drugstores in the U.S. Walgreens is second with 4,619. Rite Aid is also expanding, but at a “more restrained pace,” states the report.