Jonathan Wilson

This paper explores the impact of new format retailers and power centres on shopping centres. Throughout the 1990's and the year 2000, 88% of the big boxes presently found in the GTA were opened. Currently there are 451 big box locations and 34 power centres in the GTA that account for 21.7 million square feet of retail space. The impact of this phenomenon has been and will continue to be dramatic. The data revealed that shopping centres are being impacted in a number of ways. The most significant of these is the changing role of shopping centres. Shopping centres as a result of increased pressure from big boxes and power centres are shifting from retail based to a more service oriented role. The percent of all retail stores in shopping centres decreased 5.9% from 1996 to 2000 while service oriented stores increased 7.3%, which now account for approximately 50% of all stores in shopping centres. Stores in shopping centres in direct competition with new format retailers are those most impacted. The eight retail sectors in direct competition declined 5.6% as a proportion of total stores. The most significant were books (-35%), hardware (-5.3%), office products (-18.9%), supermarkets (-%12.3) and pet stores (-24.9%). These sectors also had higher probability of closure (16.5%) compared to all other retailers (14.1%). The highest sales growth was recorded in forward sortation areas (FSA) dominated by new format retailers, 54% increase in sales from 1989 to 1998. While those FSAs with high shopping centre vacancy rates showed a much lower growth rate of 41.1% from 1989 to 1998. Shopping centre vacancy rates were found not be associated with proximity to power centres or big boxes but were associated with internal mall variables. This would suggest that some shopping centres benefit from close proximity to power centres while others do not.