Andy Charles

The research focuses on the question posed by a major mall developer/owner (name kep confidential) for evaluation as to whether a major chain store (referred to as the chain) is an anchor tenant. This is important to assess whether such stores, which are demanding preferential treatment in terms of rent rates, are indeed providing significant levels of customer generation. Moreover, there is confusion about the strength and future of shopping centres in the new retail environment, with the expansion of big-boxes and e-commerce retailing. Concerns about the "greyfield" phenomenon, which has been coined by analysts to describe the emergence of under-performing and/or declining shopping centre property (Gomez-Insausti & Ken Jones, 2000), reflect the present atmosphere.

The research paper quantified the externality generated by the chain in twenty-one locations within shopping centres across Canada. Essentially, performance, in terms of sales of non-anchor tenants proximate to the entrances of the chain, was examined to determine the level of spillover. The non-anchor tenant mix was examined from the point of view of variety/assortment and the possible impact of the chain on various merchandise categories. The results of this initial analysis was compared to results obtained through a similar examination of non-anchor tenants proximate to a known, established anchor (referred to as the anchor). This provided a benchmark for comparison: To be considered an anchor, the stores proximate to the chain should be as productive as those close to the anchor.

It was determined that the chain is not a traditional anchor. It seems that the store proximate to the chain is only benefiting from inter-store generated externality for the most part. However, this statement can be qualified by the fact that the image of the chain has significant positive relationship with its zonal sales, but the larger variety and supposedly drawing power of the anchor (a department store) does not seem to be providing strong externality benefits for close non-anchor tenants, certainly not at a level sufficient to out-perform the inter-store externality generated around the chain.

Nevertheless, in a non-traditional sense, the chain can be viewed as an anchor. Since the malls' tenant mix is usually modified before the chain opened shop, the chain seems to be attracting 'desirable' non-anchor stores to locate close to it. The chain's image/brand seems to be its major attraction component. This seems to bear out in the observed greater opportunity to comparison shop, larger variety, and higher proportion of high-order stores found proximate to the chain's entrances. (Hence, the strong association between image/brand name and the sales of proximate tenants). In this context, the chain is generating huge levels of customer traffic, albeit indirectly, by providing a nucleus of popular retailers.