Smaller Strip Malls Have A Brighter Future, Suggests RIT Retail Expert
Eugene Fram says the trend through the next decade will be to shed excess mall space
July 15, 2009
by Marcia Morphy
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The United States has been over “malled” and over-stored for several decades, but smaller strip malls seem to have much more vitality and potential for growth, says Rochester Institute of Technology retail expert Eugene Fram.
Fram, Emeritus Professor of Marketing from RIT’s E. Philip Saunders College of Business and current marketing consultant, keeps a close eye on trends in the business environment. Fram also has an active consulting practice serving industrial, consumer and nonprofit organizations.
As he explains: “Prior to the recession, there were approximately 20 square feet of retail space per capita in the United States. This is about a 25 percent increase compared with what was available in the early 1990s. With the bankruptcy of retail chains, the closure of large retail units by Macy’s and other chains and the adoption of a ‘less is better’ value system by consumers, developers have been hard hit. The most notable has been has been General Growth Properties whose bankruptcy caused its stock price to decline about 97 percent over a two-year period from 2007 to 2009.”
Fram says the time has come for retailers to think outside the big box:
- It is clear that that the nation’s developers are going to have to shed a great deal of excess mall space, especially space in big box malls. This trend will continue for many years, perhaps a decade or more depending on the length of the current economic turmoil. See attached article at 21st Century Predictions.
- Mall owners will be forced to divide some of it in to small units as national retail chains reduce their footprints and fit their strategies to please a 21st century consumer who doesn’t demand product choices that border on infinity. Other locations will become mixed used facilities with smaller stores, 10,000 to 30,000 square feet, office complexes, entertainment facilities and rental apartments/condos. Still others will be converted by municipalities, religious organizations and educational institutions to accommodate their needs. It is possible that some can be converted to manufacturing and storage uses.
- New retail space will continue to be developed as the location of much of the current space is fixed in a big box format which makes consumer access time consuming, a problem for time-starved customers. Consequently, small strip malls will continue to be built which will allow customers to move more quickly through purchase processes.
Fram is available for media interviews. He can be reached directly at (585) 732-6817, or by e-mail at firstname.lastname@example.org.
Note: One of eight colleges at RIT, the E. Philip Saunders College of Business is accredited by the Association to Advance Collegiate Schools of Business International (AACSB International) and enrolls more than 1,200 undergraduate and graduate students. The Saunders College and its entrepreneurial Venture Creations Incubator works in partnership with RIT’s Albert J. Simone Center for Innovation and Entrepreneurship to integrate business education with RIT’s world leading technical and creative programs. The business school is also launching an executive MBA online program this fall.
In six consecutive years since 2004, Saunders undergraduate programs have ranked in the top five percent of all U.S. business schools, according to U.S. News & World Report's America's Best Colleges. In 2009, it was named one of the “Great Schools for Accounting Majors!” in The Princeton Review's “The Best 368 Colleges.”