Why is the Avalon Mall makeover succeeding, as rural retail struggles?
Pandemic has accelerated retail trends, says business prof
Signs of the pandemic's toll on retail are everywhere in Corner Brook's Valley Mall, and they all say the same thing: For Lease.
It's property manager Tammy Joyce's job to switch those signs over to storefronts, but for more than a year now, that's been a tough sell. Prior to COVID-19's arrival in Newfoundland and Labrador, she was in talks to bring five new tenants to the Valley Mall and its sister property across the street, the Millbrook Mall.
"Once the pandemic hit, everything came to a standstill," Joyce said. "And they were like, 'Well, I really can't move now, I'm just trying to stay afloat.'"
The Valley Mall has relied on its essential service mainstays, like Sobeys, to keep shoppers coming in. But the trials of COVID-19 have served to speed up trends across the retail sector that even the Valley Mall isn't immune to: a recent national report from Deloitte noted foot traffic at Canada's biggest malls dropped 42 per cent in February 2020, prior to the pandemic, compared with the same month in 2019.
(Disclosure: CBC is also a tenant at the Valley Mall.)
Bring on COVID-19, and it "definitely made it more challenging" to keep people shopping, said Joyce. Particularly for discretionary items, those dollars are being spent with a mouse click more than ever before.
"Online shopping is … a big hit, with regard to the mall settings. And of course, with our pandemic, it's really making it a lot worse," she said.
Those trends have spelled trouble for many familiar chains in the last year, most of them in fashion: Reitman's filed for bankruptcy in May 2020; Le Château in October. DavidsTea shrank from 186 outlets to 18, with both its Newfoundland locations among those closed.
One mall to rule them all
But one shopping spot in Newfoundland and Labrador is shining brighter than ever before, seemingly impervious to the sector's woes.
The Avalon Mall is in the end stages of a mall metamorphosis, with shoppers strolling through a sleek interior and no less than a dozen shiny new stores to shop from, almost all fashion retailers, including H&M, Banana Republic and Tommy Hilfiger.
The Avalon Mall, like most enclosed mall properties in the province, is owned by a national property group: in this case, Crombie REIT. The mall's transformation is the nearly final product of a three-year, $112-million renovation that's seen the province's already-largest mall expand to 593,000 square feet, with 145,000 of that leased within the last two years.
"The new stores that are slowly coming online over the last year or so — I mean, they look absolutely beautiful, customers are responding really well to them, so it's been a really exciting time," said Donna Vincent, the mall's general manager.
It does raise the question: in an era of fashion retailing bankruptcies, why is the Avalon Mall doubling down on it?
The answer, to Vincent, is that they're simply giving shoppers what they've been asking for: more stores and national chains.
"We're into multiple generations of shoppers that have been coming to the Avalon Mall. And we're trying to keep things fresh and exciting and new for them every time that they come," she said.
To an extent, one expert agrees, calling it a strategy where one mall in the province outcompetes all the rest.
"What the Avalon Mall has decided to say is, 'Look, you know, we want to be the place where people will come and we're going to make it as attractive a place for people to come,'" said Tom Cooper, a professor of strategy in the business faculty at Memorial University.
Remember Consumers Distributing?
Amid its transformation, all pale tiles and fancy light fixtures, there are signs at the Avalon Mall that traditions are being tweaked, in a way that's futuristic and old-school all at once.
Think of it as the return of Consumers Distributing: that catalogue-to-customer store that met its demise in the mid 1990s after decades in operation. (Incidentally, one of its two St. John's locations was a stone's throw from the Avalon Mall on Kenmount Road.)
To survive, retail stores are moving to a showroom model, Cooper said — an idea the Deloitte report emphasizes as essential for the future — with fewer locations and items overall but an excellent ability to get products to their customers and collect returns. Cooper recently tried to buy shoes for his daughter, but the store was out of her size: after a quick call to another location in Halifax, the proper pair arrived a few days later.
Success comes down to "really good supply chains and really good distribution mechanisms, to get products to people quickly," he said.
'A Catch-22' for small malls
The Avalon Mall's success likely won't translate down to smaller malls in Newfoundland. In Corner Brook, Joyce said there's no budget to renovate her aging spaces to keep pace and attract stores.
"If you don't have the tenants, then the revenue's not there. So it's a bit of a Catch-22," she said.
Attracting the sort of large retail customers want requires a lot of bodies, anyway; one owner flat-out told her his store would never come to an area with less than 100,000 people.
"It was hard. I was a little taken aback at first, but when I sat and thought about it, it made sense," she said.
Between the Valley and Millbrook malls, there's 41,000 square feet of free space, according to the website of the mall's owner, Sterling Group of Montreal. The company has two other Newfoundland properties, the Fraser Mall in Gander and the Marystown Mall, each more than one-quarter vacant.
Econo-Malls, another Montreal-based group that owns a slate of enclosed malls in the province, including the Exploits Valley Mall in Grand Falls-Windsor and the Bay Roberts Mall, has counted on anchors like Wal-Mart or Foodland keep it going.
"The fact that we have always focused on what became known as essential services and that we have been growing that trend over the last 10 years has definitely helped us weather the pandemic," said president Howard Wiseman, in an email.
For Joyce, she will keep trying to bring in businesses, and said she's trying to find more local small businesses as a way to lure people in. "I love local," she said.
Cooper said he doesn't know if that will be enough to keep non-essential retail afloat in rural parts of the province.
"It's a challenging question," he said, with the answer ultimately coming from the shoppers themselves.
'We need to support local malls.… It's making sure that we think about what we're buying and where we're buying it from."