Retail Traffic


In the news

New York — Emerging Trends in Real Estate 2002, an annual report produced by PricewaterhouseCoopers LLP and LendLease Real Estate Investments, offers bad tidings for retail developers. According to the forecast, a weak economy promises to exacerbate retailer troubles and bleed returns from shopping centers. Unless retailers weed out formats and development shuts down, controlling the supply of new space, many investors will bypass shopping centers altogether, the report states.

Orlando, Fla. — Tightened mall security measures were encouraged at ICSC's Fall Management and Marketing Conference. Among them: Making hourly checks for suspicious packages, inspecting roofs, service entrances and access points several times daily, probing all delivery vehicles, prohibiting overnight parking and banning all parking immediately next to buildings. Though metal detectors, heat sensors, biochemical sensors and armed guards were also discussed, most attendees said they would forego such options due to budget constraints and possible negative perception by customers.

New York — In its October 29, 2001 issue, Forbes magazine listed America's 200 best small companies. Several retailers made the list including: Chico's FAS (1); Christopher & Banks (9); Hot Topic (13); J. Jill Group (29); Krispy Kreme Doughnuts (94); Kenneth Cole Productions (98); 99 Cents Only Store (114); Deb Shops (116); Sonic (122); Sport Chalet (133); Buckle (149); Arden Group (153); Cost Plus World Market (160); O'Charley's (163); Dave & Buster's (165); Shoe Carnival (166); IHOP (181); Jos A Bank Clothiers (186); Movie Gallery (193); and S&K Famous Brands (200).

Northbrook, Ill. — Grubb & Ellis recently created a group to form partnerships between public and private sector clients. The real estate advisory firm hired former Empire State Development Corp. senior vice president John Buttarazzi to head the group.

Orlando, Fla. — With profits at a 10-year low and attendance dwindling, Walt Disney World decided to scale back its operations. The 30-year-old park closed down its 1,500-room French Quarter Resort, shuttered its high-tech-oriented Carousel of Progress attraction and shelved the opening of its nearly completed $460 million, 5,760-room Pop Century Resort. The French Quarter closing is the park's largest to date.

Schaumburg, Ill. — Wal-Mart left a huge void in the market research industry when it announced this summer it will no longer share its point-of-sale data with the industry as a whole. To make up for the loss of this invaluable volume, price and demographic trend-tracking information, ACNielson U.S. introduced its Wal-Mart Channel Service. The service, which uses data gathered from the ACNeilson Homescan Consumer panel (80% of whom are regular Wal-Mart shoppers), will allow other retailers to continue to track the industry leader's sales.

New YorkStandard & Poor's announced plans to consider REITs for inclusion in its U.S. indices, including the S&P 500. The decision reflects Standard & Poor's conclusion that REITs have become operating companies subject to the same economic and financial factors as other publicly traded U.S. companies listed on major American stock exchanges. In the past, REITs were delegated to a separate indice — S&P's REIT Composite Index — because of its role as passive investment vehicle during the late 1970s through the mid-1990s. The company will continue to maintain and publish its REIT Composite Index. New Plan Excel Realty Trust and Colonial Properties Trust will be among the first retail REITs added to the S&P 500.

Detroit — Guided by the 1997 New Center Economic Development Plan, the city's New Center Council recently formed a wholly-owned, for-profit group to develop projects in the former General Motors headquarters area. Called the New Center Council Development Corp., the group is chaired by GM's Conrad Schwartz and includes executives from RFG Consulting, TrizecHahn and The Wellness Plan.

New York — The Sept. 11 terrorist attacks have changed Americans' consumer habits, according to a new poll conducted by Euro RSCG Worldwide. Key findings of the poll, which was culled from an online survey of a random and representative sample of 300 Americans aged 18 years and older, are as follows:

  • Almost half of respondents plan to spend less money than usual this holiday season, while only 11% of men and 7% of women plan to spend more than usual. Greeting card sales may also experience a decline: 13% of men and 9% of women indicate they won't send holiday cards this year due to the Anthrax scare.

  • A majority of respondents plan on spending more time with family this holiday season, and 41% of men and 35% of women plan to focus more on the religious side of the holidays.

  • Many respondents have changed their eating habits since the attacks: 17.5% are eating more healthfully, 14% are eating more comfort foods and 11% are snacking more. Additionally, 25% are sharing more meals with family and 22% are eating at home more often.

Retailer roundup

Troy, Mich.Kmart Corp. is converting 10 of its existing Big Kmart stores to its SuperCenter format, and will use the success of these locations to determine if it will convert even more existing stores to the format in coming years. “Right now our plans are to go slow and treat these openings as test cases,” says chairman and CEO Chuck Conaway. “But we believe that we have anywhere from 1,000 to 1,300 stores that could be converted to SuperCenters.” Kmart's SuperCenter formats include full-line grocery stores, video rental, hair salons, florists, UPS shipping, banking, photo processing, in-store eateries and pharmacies.

Woonsocket, R.I. — Following a 16% decline in third-quarter earnings, CVS Corp. announced it will close 200 stores next month. The chain, which includes 4,000 stores across the United States, will also lay off 2% of its headquarters staff.

SIDEBAR: Insurance against terrorism & acts of war

REITs and other real estate companies could be in big trouble when the time comes to renew insurance coverage in January. The reinsurance and insurance industries informed the U.S. House Financial Services Committee in September that new policies will exclude acts of war and acts of terrorism and that reinsurance for terrorism is unavailable in the marketplace.

As a result, many retail property owners have been advised that their policies for 2002 may not be renewed or their policies will exclude terror/war risks. Without adequate insurance, it will be difficult to operate or acquire properties, to refinance loans and to sell commercial-backed securities.

But REITS have a strong ally, NAREIT, taking care of their interests. In a recent letter to President Bush, NAREIT president and CEO Steven Wechsler says, “Without such coverage, your efforts to stimulate the economy may be hindered as many business sectors will face economic disruption as a result of their inability to acquire terror-related insurance.”

NAREIT recommends the Bush Administration and Congress adopt a plan before Jan. 1 to ensure the availability of such insurance. According to NAREIT, the plan should address the following points to be successful:

  • Duration:

    The program must be of sufficient duration to provide financial certainty for lenders.

  • Definition: The program must cover an expansive notion of terrorism so that future events along the lines of Sept. 11, 2001 are covered.

  • Deductible: The program must consider apportionment of loss exposure among property owner, lender, insurer and the Federal government; a dramatic and unsupportable increase in deductibles to property owners could be tantamount to no coverage at all.

  • Disclosure: With property and casualty insurance rates already skyrocketing prior to Sept. 11, insurers should be required to separately disclose the cost of terrorist coverage to avoid any misunderstanding as to the program's impact on overall insurance rates.

SIDEBAR: What is a lifestyle center?

Most industry pros know a lifestyle center when they see one. But when it comes to defining the concept, they're at a loss for words. For clarification, SCW looked back to our June 1992 issue, which included an editorial by Terri McEwen, president of The Poag & McEwen Co. — long recognized as an initiator of the lifestyle trend with the company's 1987 The Shops of Saddle Creek project in Memphis, Tenn. McEwen characterized the project as an “anchorless center” rather than a lifestyle one. “We have found that the synergy created by a well-defined tenant mix becomes an anchor unto itself,” McEwen said. Since then, The Poag & McEwen Co. changed its name to Poag & McEwen Lifestyle Centers, a clear indication of their commitment to the format. SCW asked a few other experts for their take on the true definition of a lifestyle center. Here are their responses:

“When we think of a ‘lifestyle center,’ we talk about creating places where people like to go as opposed to where they like to shop. It becomes this special place — a gathering place — and people enjoy going there. When they get there, obviously they can shop and go to restaurants and so forth. But what characterizes these places is that they are special, and they are places where people like to be.” — Jim Bennett, president, Madison Marquette Realty Services, Minnetonka, Minn.

“I think the industry has defined it as ‘a center targeted at the enjoyments of life.’ Its popularity has been predicated on our excess economy of the last decade and the excess spending powers toward hobbies and other enthusiasms, and also on the convenience stature of customer connection to the individual store by being able to park conveniently to individual units.” — Stanley Eichelbaum, president, Marketing Developments Inc., a Cincinnati-based international retail development research and consulting firm.

“Our definition of a lifestyle center is distinguished by the fact that there are many different lifestyles that people are living. The concept is not ‘cookie cutter’ but really reflects a diversity of people's lifestyles and needs. There's really no formula, per se. True lifestyle centers promote a sense of discovery and experience as well as a reason to be there. Also, the environment in which these centers are built — typically outdoors — is much more attractive to people than being in an enclosed environment.” — Nathan Fishkin, senior vice president and managing director, Street Retail Inc., Federal Realty Investment Trust, Rockville, Md.

“My definition of a lifestyle center is one that meets two criteria. One, it can contain stores which serve a common customer and relate to a common type of merchandise such as home furnishings, children's stores, and even sporting goods stores. The other criteria is that it serves a particular niche of consumers with upscale stores that are located in small, elegant shopping centers. A key factor in the concept's popularity is its ability to stand out in the marketplace when there are so many shopping centers out there today, whether open-air or enclosed centers. Within most major metropolitan areas, there are dozens and dozens of places where you can go to shop, so if you can create an environment and create a destination for consumers to go, then I think you've got a leg up on essentially anybody in this business.” — George Whalin, president and CEO, Retail Management Consultants, San Marcos, Calif.

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