Madness As New Shopping Center Opens

The above photograph is of the old shopping center taken from the car park of the new center. The old center has one destination shop left besides the restaurants and you kind of worry for these shops. I would guess this will become more of a restaurant food center as I don't see how and retailers can survive otherwise.

Yesterday the new shopping center just down the road from where I live opened and this afternoon we popped in to see what shops are available. The landlord and owner of this new center is the same owner of the center across the road which is kind of an odd set up. If you were a shop owner in the old center you would have every right to feel aggrieved with the land lord now diluting your sales.

The shops and his tenants across the road in the old center will feel the impact directly in their sales and you wonder why they did not move across to the new center. There are a few tenants who have moved from another center close by and these being key destination shops that people will visit. One does not have to guess what a blow this will be to the shops left in those centers as that particular center will become a white elephant.

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I will tell you how swamped this area is with shopping centers is I could walk to 10 centers and there is not a crazy number of people using these centers. Even if you multiplied the households in the area by 5 times which there obviously is not that number so one would approximate maybe 300K people in the area with 5 shopping malls and 5 strip mall centers. There would have been 11 but one completely shut down around 6 years ago and is still empty and fenced off.

What will happen over the next 5-10 years is these centers will cannibalize each other and we will end up with 4 or 5. The numbers of residents in the area tell you that this is not sustainable long term and shops in order to survive will have to move to centers that are busy. The big fruit and vegetable retailer in one of the old centers has moved into a swanky new retail space which will attract most of the residents in the area. The butcher who was situated next door to this retail outlet in the old center will see the footfall drop alarmingly and they should have moved at the same time.

I have mentioned this before and is kind of my guide number and that is in the UK you have to have a catchment area of 250K residents in order to receive planning permission to build a shopping mall. This planning permission number protects the developers and the retailers knowing they have the foot fall in the area. For some South Africa is obsessed with shopping centers and has 5 x more than the UK with a much smaller customer base.

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