Is Yorkdale Shopping Centre the Future of Malls?
A lot has gone wrong for the classic shopping mall in Canada over the past five years. Beleaguered retailers laid-off employees, filed for creditor protection or, in Target’s case, took off for good.
But amid all the upheaval in consumer demand, some shopping malls in Canada are adapting to the changes all around them. And a select few, like the Yorkdale Shopping Centre, are reaping major benefits.
What exactly happened to the profit margins of shopping malls in Canada? To put it simply, several factors combined, including the rise of ecommerce, changing consumer tastes and the millennial generation, with their own unique spending habits.
Per the Huffington Post, the rise of specialty retailers—such as stand-alone stores for brands such as Hunter boots and Canada Goose jackets—and discount stores, including Walmart and Dollarama, are also luring shoppers away from former Canadian mall stalwarts like Sears.
Meanwhile, technological advances like smartphone cameras have eliminated old legacy photography stores like Blacks. Online trading platforms like Bunz and Kijiji have lessened the need to buy new items.
And while demand has changes, Canada has been caught possessing too much shopping mall real estate: 94 square metres of retail space for every 100 people, according to data from the Shopping Centre Council of Australia. That’s far more than the United Kingdom—at 44 square metres—and Germany—at 22 square metres, writes HuffPo.
Finally, the millennial generation that malls depend on aren’t driving as many cars as their parents did, which reduces their mobility. They also prefer to spend more money on experiences such as travel over material things. The result is that the savviest mall operators have been forced to change their strategy and reinvent their spaces.
Yorkdale Shopping Centre has been a model example in that regard. Per the Globe and Mail, the North York mall lists annual sales figures of $1.6-billion, generated by 18 million visitors.
According to Jay Drexler, the national vice-president of retail leasing at Oxford Properties, which is the managing partner at Yorkdale, the centre began emphasizing a higher-end strategy about 12 years ago, beginning with the success of the shopping centre’s Holt Renfrew store. In 2009, Yorkdale’s first international luxury addition was Tiffany & Co. In the following years, writes the Globe and Mail, the shopping centre added one new luxury brand per year, which recently increased to three or four annual additions.
As Toronto’s high-end population grows, along with it comes a larger demand for high-end fashion, beauty, tech and housewares. The Globe noted that all those international luxury brands with stores in the city’s Bloor-Yorkville neighbourhood are now targeting none other than Yorkdale for their second location.
It’s not just the luxury brands that Yorkdale uses to entice new generations of shoppers. As HuffPo explains, Yorkdale doubled down on food offerings—which draw in shoppers and keep them inside longer—bringing in a Jamie Oliver restaurant and more recently, Canada’s first Cheesecake Factory.
The mall also generates buzz with Instagram-worthy events like hosting Fashion Santa, who provides an opportunity to snap selfies with the swoon-worthy, hipster version of Old Saint Nick. Wrote HuffPo.
It’s all paying dividends, too: Yorkdale leads Canada’s malls in sales per square footage, according to the Retail Council of Canada.
Drexler sees the major shifts in consumer demand and has bet on a mix of retailers in the shopping centre that will include a smaller concentration of fashion boutiques and more offerings in the beauty, home, tech and entertainment categories. Moreover, it could include popular e-commerce (businesses) that shift to bricks-and-mortar.
Clearly, this can’t easily be replicated across Canada. A mall in Moose Jaw, Saskatchewan simply isn’t blessed the massive foot traffic that walk in and out of Yorkdale every day.
Armin Begic, director of the retail business group at market-research firm NPD Group, told HuffPo that malls in smaller cities will replace anchors with multiple, smaller tenants featuring the type of experiences their customers want. An example of this type of creative retailer could be Indigo Books & Music Inc., with its cafes, book clubs and children’s toy area.
Others have other solutions for malls in smaller centres, like turning them into mixed-use spaces with restaurants, dentist offices, gyms and even condos.
What’s certain is that the times are changing, and these shopping centres are doing anything they possibly can to remain relevant. What’s also clear is that, in a shifting consumer landscape, places like Yorkdale Shopping Centre are reaping the rewards like never before.
By Joseph Czikk