America’s Desperate Mall Owners Turn To Grocers, Doctors & High Schools To Fill Empty Space
by Tyler Durden
ZeroHedge.com
Mar 7, 2017
Once a shining beacon of American capitalism, malls around the U.S. are failing at an alarming rate due to a combination of shifting consumption patterns, years of underinvestment by mall owners and a spate of retailer bankruptcies over the past 12 months that have left large swaths of once prime real estate empty (see “Number Of Distressed US Retailers Highest Since The Great Recession”).
Now, as the vacant square footage grows larger, mall owners are being increasingly forced to turn to non-conventional tenants to fill empty space. Per the Wall Street Journal, the latest target of mall owners is yet another struggling industry, grocers, with everyone from Whole Foods to Kroger looking to snap up square footage at discount prices.
Natick Mall in Natick, Mass., is leasing 194,000 square feet of space vacated by J.C. Penney Co. to upscale grocer Wegmans Food Markets Inc., which is planning to open a store in 2018.
College Mall in Bloomington, Ind., plans to bring in 365 by Whole Foods Market in the fall.
Grocery giant Kroger Co., meanwhile, has purchased a former Macy’s Inc. location at Kingsdale Shopping Center in Upper Arlington, Ohio, and plans to build a new store in its place.
Of course, mall owners tout the defensive nature of grocers who are, at least for now, more immune to online retailers and the economic cycle than traditional retailers. And while there may be some truth in those statements, they certainly overlook some major challenges associated with adding grocers to mall spaces including the fact that malls are typically intended to attract customers from a much larger radius whereas traditional grocery shoppers generally prefer more local options.
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