Rearranging retail to cater to a shift in shopper experience

CTV Calgary: Changing face of Calgary retail Brad Macleod reports on the new approach to shopping mall design which will leave shoppers out in the cold, literally.

The face of retail is changing in the city and is inspired by the demand from consumers for a unique shopping experience and a desire by store owners to set themselves apart from the competition.

If you have driven by Deerfoot Mall lately you probably have noticed the construction or deconstruction of the shopping centre.

The mall is several years old and was in need of an update so the owners of the property decided to "de-mall" it.

The dismantling of the traditional closed-in mall will create a more outdoor experience and many of the restaurants and shops will have their own entrances from the outside.

The redevelopment is part of a growing trend to revitalize retail in the city and offers the developer the opportunity to move into an enlarged site in an established location.

“There’s always a need to stay fresh and new and innovative. I don’t think the indoor shopping is going away, what I see is choices. There’s many days in Calgary where outdoor, fresh air, is what people want, certainly there’s several months of the year where you want to be inside, it’s about choices and I think where Calgary is headed, is you’re going to get a few really good indoor malls and a few really good outdoor, energy, urban, mixed-use facilities,” said Darren Kwiatkowski, Executive Vice President of Shape Properties, the developer of Destination: Deerfoot City.

Bruce Bynoe is with Avison Young Alberta, a commercial real estate company in Calgary, and specializes in retail and land use.

“Deerfoot Mall, as an example, it’s going through some changes. Anchors moved from there, as a result of consolidations in the past and tenants moved to Sunridge Mall and a new owner has taken over and is looking at it fresh, bringing in new anchors, such as Cabelas. Moving Canadian Tire from smaller premises across Deerfoot into the mall, making changes on an on-going basis. Everyone’s trying to build a better mousetrap,” he said.

Bynoe says the retail market is constantly changing, that there is an undersupply of retail sites and portions of the city are under retailed.

He says the land use process in Calgary is extremely tight and competition is fierce.

“There are barriers to entry in Calgary. The land use process is extremely tight and it takes a long time for people to come in,” said Bynoe “Most sectors of the city, there are very few retail opportunities. In some cases, retailers such as food stores, going into new neighbourhoods, have to be aggressive to get a location because the land use is so tight, if they don’t step up, perhaps before the population is there to warrant a store, they won’t get a location. Land use is very tight and tenants compete for locations.”

Bynoe say consumers don’t need to be concerned about empty store fronts popping up now that U.S. retailer Target has decided to leave the Canadian market.

“There’s been a lot of talk about Target leaving Canada and what that’s going to mean, is there going to be vacant stores? In some cases perhaps but take Signal Hill as an example and Chinook and Market Mall, there are going to be tenants lined up for the space so it’s not really a question of vacant store fronts and tumble weeds in the parking lot, the space will be occupied by new tenants.”

Darren Milne is the General Manager of Market Mall and says people will show up to shop no matter the venue.

He says it is important to attract unique and "first to market" retailers but that his company has no plans to follow suit and expand the outdoor experience to its properties.

"De-malling is not something that we would ever look at doing with Market Mall. We are a really dominant mall. We stay as the number two mall in Calgary behind our sister property Chinook. We're consistently one of the top ten most productive malls in Canada and so our business is malls and that is what we will continue to do," said Milne.

He says consumers may have noticed a few vacant shops in the mall lately but that is due to a number of leases expiring at once and obviously the departure of Target.

Even with the drop in oil prices and the threat of recession, Calgary is still considered a strong retail market and more new stores are moving here every day.

U.S. grocery retailer Whole Foods Market recently announced it will open stores in Calgary and Edmonton and Bynoe says whenever a new player comes to the table it forces the others to step up their game.

“They’re operating in Vancouver, they’re operating in Toronto, they’re very high producing retailer and people are looking forward to them,” he said. “They have a niche in the market and everyone else improves their game as a result.

He says there is a retail shortage in Calgary and a number of his clients have told him that their stores in Alberta have exceeded the national average.

“I have a clients whose six of their top ten stores are in Alberta and they’re looking to expand.”

Whole Foods Market has not yet announced where it will open a store in Calgary but retail experts say the rumour is it will take a space at Northland Village Shops in the northwest and could also be looking to open a second store in the south later on.

The owners of Deerfoot Mall say Cabela’s will open in the fall of 2015 and a new Canadian Tire store will be ready to go the year after.

The whole project is expected to be completed by the fall of 2017.

For more information on the changes to Deerfoot Mall, click HERE.

(With files from Brad McLeod)