That dark big box (and other) retail isn't coming back, is it?

In My Humble Opinion
1

I live in Indianapolis. Feel feel to compare to your own home town.

I just glanced at the front page of the Indy Star the other day: unemployment is low here, less than 5%. People are in demand for retail jobs.

And yet, funny thing… there is a SHITTON of dark retail in this town. Let’s talk about that.

The Target on 86th St. near the Castleton Costco recently shut down. I wouldn’t call it a super-great location, but neither was it terrible. But there is a bunch of dark retail in Castleton (which is a major shopping area on the Northside of the city). Circuit City went dark years ago… nada. There are these whole chunks of ghostly strip mall (for smaller but still ostensibly large) retail sitting empty for years. Keep in mind that this is a relatively nice part of the city, not like shithole Washington Street where you can find mile after mile of scary-shitty-junkalicious retail, filled and empty but mostly the latter.

Nordstrom ditched the Circle Center Mall downtown after it moved into Fashion Mall in Keystone (arguably the ritziest retail zone in Indy). The Circle Center Mall is no slouch, it seems pretty busy and reasonably semi-sorta-upscale, but the Nordstrom space has been dead empty for, what is it, five or more years now? This is “prime” first-floor retail space. In truth, I have yet to see a big-box retail space get filled once empty in Indy, except for the aforementioned Fashion Mall, which is as upscale as it’s gonna get around here.

Carmel and Fishers are some of the richest suburbs, but there is plenty of blasted-out retail there as well. 116th St. is a decimated mess. At the same new, new retail is being built elsewhere. All the time. Out with the old, in with the new. Let that old retail rot in those previously “great areas.” (That said, the new stuff tends to be certain kinds of things. Lots of Whole Foods-imitator supermarkets are appearing. I’m not seeing a lot of other big box stuff coming in.)

So what’s my overall conclusion? A few points:

• Indy and probably a lot of other towns are probably saturated at this point with generic big box retail like Walmart, Target, Big Lots, Staples (lol), and stuff of that ilk. Anything big that’s coming in is higher end-stuff like high-end supermarkets, international supermarkets, etc.

• Typical boom-and-bust dynamics are in play. New ‘n’ fancy retail would much prefer to go into the shiny, all-new shopping center than occupy old empty retail.

• Because of online shopping, we need much, much less retail space than in the past. Even though retail unemployment is low in Indy right now, there’s enough empty retail to choke Cthulhu. That says something. Never do I feel, “Man, we are so lacking in the retail experiences I want in this city!” Nope. We’ve got pretty much everything here now, including great, huge international groceries.

• So yeah, that dark retail will probably sit moribund… forever. Even if the economy comes roaring back late 90s-style, we don’t need it.

• Malls are legacy infrastructure that are not going to be built much any more, and many will die off. I have been at Oak Brook in the Chicago burbs several times recently, and that used to be a very fancy place. High-end, 'twas. Now it feels pretty run down and rather sad. A nice Thai restaurant there just shut down.

• Oh, and we are going to lose a LOT more anchors before this is all over. KMart and Sears, only a matter of time before they tube it. Barnes and Noble… (Reminds that Borders’ prime space in the mall-y thing across from the Fashion Mall has been dead empty for years now.) Many a death shall occur, many a new life shall not spring forth…

It’s sad because it creates rather blighty chunks throughout the city. I’m not sure what can really be done. The future of retail will NOT look like its past.

Thoughts?

2

With all so many retail stores going down, yet unemployment is low? Where are all the jobs coming from then?

I don’t think many people are going to miss K-Mart and Sears going belly-up.

3

That’s a very good question that I cannot answer. It may be that stock moves through current retail more quickly, so they need more stockers. More customers, more cashiers.

I agree. Dinosaur retail that surprisingly is not yet extinct.

4

The town I work in is heading that way.

Aside from quite a few empty shops in the town high street (something you’d never see twenty or even ten years ago; retail space used to be very much in demand), there’s a smallish mall right in the middle of the town centre. It opened a few years ago (about ten years?) to great fanfare, but never really took off that well - shops would open, stay there for about six months, then close and be replaced with something else. Well, just recently, the shops kept closing but nothing new was opening in their place. The mall is like a ghost town now - out of about 25 shops in total, there are only three that are still open. Some of the shops have been closed for five years or more. I can’t see the remaining three lasting much longer, either. With just three shops there’s very little reason to go through there now, so the place is almost always empty, save for a few people using it for a shortcut.
And this is a place right in the middle of a popular, busy town - it’s not some random bit of land in the middle of nowhere.

Funnily enough, when I walked through the other day, I saw some signs up - they’re redeveloping the whole place. Thing is, it’s not particularly run down, it’s only ten years old (and barely used) after all! I had a quick look at the plans and as far as I can see they’re not changing the use of the place - it’s still going to be shops - and they’re not doing anything to increase the presence of the place either. They’re just doing the mall equivalent of a coat of paint and hoping that brings the crowds, and business, flocking back. It won’t, of course - that ship has long sailed - so I predict a shiny new mall area full of shiny, new but completely empty shops. It’s their money, I guess.

5

Our local regional mall was refurbished a few years ago, which included shuffling around the square footage inside to accommodate certain stores.

Turned out that those particular stores have either closed or they’re hanging by a slim thread.

The busiest store, IMO, is the Target which anchors the far end.

Inside you’ll find people milling around but nobody’s buying anything. There are many upscale retailers, including Nordstrom…some of those stores are lucky to get a handful of customers on any given day. They also happen to be the stores which advertise often for help.

I’ve been in retail for most of my adult life, and there’s nothing worse than working in a constantly “dead” store. Hence, the rapid turnover and constant advertising for help.

6

Several my town actually have come back in the last year or two after having been empty for a while. The mall even filled an anchor store that had been vacant since around 2008, with an actual retail chain instead of the dubious seasonal no-name places that had been using it (Halloween stores, Christmas stores, indoor go-kart tracks and so on).

7

My thoughts: The OP pretty well nailed the whole discussion. The rest will just be folks sharing the details in their locale.

Retail is undergoing a vast sea change and the square footage needed per capita will soon be half what it was in, say, 1990. IOW, except in areas with growing populations, 50% of all current retail space will die.

And that rosy scenario assumes constant demographics & economics. If indeed the 20+ -year trend of hollowing out the middle class continues and effective disposable income continues to slide for a growing slice of the populace, the carnage will be even greater.

One hopes we get smart early and turn these useless buildings and lots into parks or at least grassy open fields before they become homeless magnets.

8

But the OP also states that in his city new retail space is constantly being built “elsewhere”. So is the total square footage less than before, or just moved to newer locations?

Obvously, some chains are dying for good reason (Amazon has defeated the big bookstores and the big electronics stores;. Sears has been defeated by larger and more efficient big box stores,etc )
When a big box store closes, it leaves a huge empty shell of space,which isn’t really useful for anything but another big box store.So that might explain why the OP sees so much “dark retail”–the demographics might have changed so that the location is no longer good, and the store moves to a new neighborhood.The huge empty shell sticks out in your memory, but the store itself still exists, somewhere else.
But is the total square footage and total number of retail employees declining by half?

9

Years ago, there was one mall in this town (Regency Square), and one mall only-if you said, “Hey I am going to the mall,” everyone knew what you meant.

I went there a few weeks back looking for some new shoes. I came in through one of the clothing stores (which itself was pretty run down and dirty and in the middle of a going out business sale, natch), walked out into the main mall-and was greeted by a total void. Just about every store was gone-not just closed, but obliterated. The only thing open in there was some New Age church, of all things. I was shocked to the core.

10

That’s sad, John DiFool. I used to work in a party shop across from Regency Mall, and remember how totally crowded the mall was at weekends and pre-Christmas.

Also, Houlihans (closed now, I think) holds some good memories for me.

I haven’t been over to Regency in years, though. I lived closer to OP so it was quite a haul.

11

Yeah, we have sort of a weird thing going on near here – I live near Rt. 1 (practically everyone on the East Coast does) and they keep putting in new tiny strip malls with marginal businesses that go bust and the place stays empty for a while. One of these strip malls was empty for a couple of years and got converted into a charter school, so there was clearly not a ton of demand for retail space. But they’re putting a new retail space in maybe a half mile down the road, even though we’re not in any immediate need of new liquor/variety stores, pizza places or nail salons. So I have no idea what they’re planning to put in there.

12

Around here the old (say 25 years) enclosed mall is on it’s last legs. I still go there out of habit, but the place is losing stores fast. And it is losing stores to the new mall that opened up near where I live. The funny thing is the new mall is all outdoors. Every store and restaurant entrance is outside. You literally have to get back in your car and drive down to another store in the same mall. This is how it is designed. Apparently mall designers have found this to be the next big thing. Admittedly, I almost never go to the mall (old one or new one) with the intent of going to more than one store, so maybe they have a point. The mall stores aren’t paying to A/C a big atrium so that should make it easier for them.
But it is sad to see a perfectly good location in the old mall slide into disuse.

13

We just moved from one area to another. The previous area had an indoor shopping mall that had managed to revitalize itself. The new area, while booming in terms of population and retail, has a mall that is nearly dead.

I’m watching and waiting to see what happens in the new place. Its mall is dated and features no attractions aside from the stores.

The previous place, on the other hand, had an indoor (rain-free, air-conditioned!) playground, which was a huge draw by itself. Also coin-operated rides, a gorgeous carousel, thriving stall vendors doing fun things like offering free hair curling and fingernail decals, train rides around the mall on weekends, seating areas with plush sofas and massage chairs … it was just a fun place to go, especially at Christmas. And people went there because it was fun.

Of course, a mall needs cash to accomplish all that. So we’ll see what happens.

14

Oak Brook just did a big renovation so they can’t be doing too poorly. They have the advantage of being an outdoor mall so they can sell the “town centre lifestyle” thing that many shopping centers are going for these days (versus the antiquated indoor model).

That move away from indoor malls can also help explain why they’re having trouble filling vacancies. The outdoor model is much more cost efficient with lower leases for the store owners (this article says $25-60 per sq foot for outdoor versus $60-80/sf for indoor). The company I work for (construction related) recently bid on a major outdoor outlet mall and renovations for another existing mall so, if there’s a future for the large shopping center concept, it’s probably in that.

Of course that doesn’t answer why people keep seeming to build vacant strip malls and the like. Around here in the west/southwest Chicago suburbs, I think it was mostly in anticipation of new housing developments going in. Then the market went bust and you have these four-six year old strip malls that have never seen a tenet. And the few tenets they do get suffer because you have a big empty parking lot and row of buildings with some real estate office or dentist tucked into one corner.

15

Like “thou shalt make a profit”?

16

Yet isnt a new type of shopping area growing? Here in Kansas City Town Square Plaza, which combines retail, restaurants, office space, and housing, is booming and part of the “new urban” movement. LINK

Out in Kansas City Kansas the Legends shopping area currently brings in the most sales tax income in the state of Kansas. But its an amazing combination of HUGE retail (Nebraska Furniture Mart, Cabela’s) with 2 stadiums (soccer and baseball), plus the Kansas Speedway, plus hotels, has lead to this huge retail area and unique restaurants like TRex cafe. Theirs even a Saks 5th Avenue. LINK

17

Yeah, our mall is the only place that has empty space. The big stores and restaurants either get reused or torn down. Our square fairs a lot better.

18

Yes, they were doing construction a year or so back when we went there. I’m not sure what’s really changed, but it’s a huge, sprawling place.

I agree that it’s not doing “too bad,” but there is a feeling of the bloom being off the rose, whereas in the 80s and 90s it was the place to go, it seemed, for that fancy shopping experience. It had Neiman Marcus! Speaking of which, do you ever hear about Neiman Marcus any more? So many retailers just don’t seem very relevant any more. But I don’t know any specifics about NM…

Yeah, I heard the term “lifestyle center” even before the big real estate crash. There is a certain kind of optimism built into the term, as though we were all going to have the wherewithal to kick back and work on our “lifestyles” with the help of some premium retail.

I had not known about that pricing difference. Thanks for that info.

The new retail I see being built in Indy Metro is like that: it seems geography-based. A new outdoor shopping thingie was built in Noblesville, which was probably genuinely underserved in terms of basic local retail. Then there are specific juicy sites that get targeted (but not “Target-ed”). As I said above, I see new frou-frou groceries going in here and there (Fresh Market, Earth Fare, etc.). They seem to prefer all-new locations as opposed to using old ones. And they also seem to be a rising trend in opposition to the overall retail contraction.

19

Right, the whole “mixed use” thing. I have a broker license, actually, though I don’t really use it. But IIRC from my more active days, zoning laws in various locales were not very friendly to mixed use, and that has changed, making them more feasible now. Thus, there may well have been latent demand for such properties (restaurant right beneath apartments, duh! etc.) that couldn’t be fulfilled.

And there is more demand for apartments now that mortgage credit is tighter, etc.

20

Besides buying groceries/beer/gas. I go to a brick and mortar store about 6 times a year. Maybe.

A lot of that will be either lumber yards or automotive. I even buy my Blue Jeans on line now since I can never find the style and size I want. Even at the Levis store. F’em.

A lot of online retailers don’t tell you how they are going to ship. We can get packages at home, if they can find us. So that’s a 50/50 shot. And if it has to be signed for, or is raining, or they can’t make it to the house because of snow, well…

Since the post office is so screwy, we got a box at the UPS ‘store’. They take delivery from USPS, FedX, and of course UPS. And they email me when it arrives.