Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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T H E C O M M O N A R E A N E W S F R O M A L L C O R N E R S O F T H E S H O P P I N G C E N T E R I N D U S T RY 6 S C T / M A R C H 2 0 1 6 While traffic at Simon malls last year may have been flat, same-store sales climbed by 5.7 percent, the firm reports. This is because consumers are better informed and more focused than ever when they arrive at the malls these days, and they therefore browse around less and spend more, says David Simon, chairman and CEO of the firm, which has 108 malls totaling 122 million square feet in its port- folio. The firm also owns 71 outlet centers totaling 30 mil- lion square feet. "I know you've all heard about mall traffic decreases," Simon said on an earnings call. "But let me give you some facts based on our internal data across the largest retail portfolio in the U.S. and not just estimates derived from arbitrary algorithms. Traffic at our malls was flat for the year, including the holiday season; traffic at our Premium Outlets increased 1.5 percent for the year and more than 2 percent for the holidays; and traffic at the Mills increased slightly for the year as well." Simon notes that mobile technology allows consumers to preshop and thus to browse fewer stores during their shopping trips than in the past. Any declines in store traffic are driven by the retail- ers themselves and not related to overall mall traffic, he argued. Meanwhile, at General Growth Properties malls, traffic grew by 2 percent last year, while same-store sales per square foot increased by 3 percent at the company's small-shop tenants, according to CEO Sandeep Mathrani. "Mall traffic is actually up, and one of the biggest pain points during the holiday sea- son was lack of parking," he said. "So we're obviously seeing people come to the mall; we're seeing them stay longer at the mall; they're shopping a lot of fewer stores when they come into the mall — but they're definitely roaming the malls and shopping." Macerich recently did customer research at a cross-section of its centers, says the firm's chair- man and CEO Arthur Coppola. "Research indicated that lower average expenditures and shorter trip durations were more than offset by increased frequency of visits and higher conver- sion rates," he said. And while not all mall owners share traffic stats at their properties, sales were up across the board in 2015. Same-store sales per square foot grew by 10 percent at PREIT malls, 8.2 percent at Macerich malls and 3.9 percent at CBL & Associates Prop- erties malls, according to those firms. Malls saw traffic, sales growth in 2015 '' Lower average expenditures and shorter trip durations were more than offset by increased frequency of visits and higher conversion rates. ''

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