Retail Trends, Part III – Hispanic Shopping Malls



Hispanic Shopping Malls provide event spaces as well as entertainment and shopping experiences.

In Part I Craig Slocum, AIA covered general trends; in Part II I introduced the fastest growing segment – Hispanic Shopping Malls.  In Part III we delve deeper into how successful developers are responding to the Hispanic trend.

Demographics.  Smart developers study the local demographic and adjust days and hours of operation to reflect the culture.  In Hispanic culture extended family units spend time together and of the 50 million Hispanics in the US today 25% are under 18.  The younger population especially enjoys "domingeo" or hanging out.  Hispanic malls are open late, until 9 or 10 pm, and definitely on Sundays.

Culture.  Mall owners pay for entertainment and host community events.  They observe and celebrate Latin holidays and customs in plaza spaces built for entertainment, music, dancing and participatory activities.  Pool tables, foos ball and big slides entertain multiple generations, and ample benches and chairs are provided for customers to sit and linger.

The right retail mix.  In Phoenix, Arizona at the Desert Sky Mall Hispanic-centric stores are mixed with major retailers with training available for mainstream retailers to learn more about Latino preferences and purchasing styles.  An empty 77,000 sf Mervyns was re-purposed into a traditional Latin Mercado housing 220 small shops.  These shops include fast-food and bakeries, beauty salons and flower shops, carnicerias or meat markets, and many other retailers.  Short-term and temporary leases are offered and the Mercado acts as an incubator for new stores to get their footing before moving to the regular mall.  The mainstream theater company was replaced with Cinema Latino.

Ideal locations.  Many Hispanic malls have been situated in older malls where the previous management failed to acknowledge changing demographics and then lost market share.  These ‘distressed retail’ locations may not be poor locations after all.  Sometimes all they need is the right vision.  –

Jorge Pierson, AIA, LEED AP is an Associate with CSHQA and Regional Manager of CSHQA's Phoenix office.  He has practiced architecture in Phoenix for over 30 years providing planning, design and project management of retail, resort, residential and industrial projects throughout the Southwest.

Optimistic About Retail? You must have been at RECon 2013



Restaurants like Ling & Louie's are building both pad and airport concession spaces to expand their brand.

Last week I attended RECon 2013, the annual global event for the retail real estate community held in Las Vegas.  After sharing stories, ideas and trends with 30,000 of my best friends I’d say the pulse of the North American retail industry is guarded optimism.  With housing in the white-hot zone I trust the adage ‘retail follows rooftops’ will prove itself once again. 

These are the trends to keep in mind:

1.  Growth will be modest.  Overall growth will stay in the single digits for now.  Helpful factors include:  a better capitol market, an uptick in consumer spending and increased restaurant income.

2.  Re-purposing is winning over ground up.  Non-retail and class-C retail spaces are being remodeled for quality retail.  Previous failed big boxes (Circuit City, Linens & Things) are being rapidly absorbed.  Projects once started and abandoned in the recession are coming alive again.

3.  Shift toward urban density.  The millennium generation is moving away from the suburbs and toward the rewards of urban living – more diversity, interaction, entertainment and choices.  Retailers are running sprints to catch this growing consumer clout.  Super store Walmart is rolling out 40,000 sf neighborhood stores and 15,000 sf express stores.  Home Depot began introducing down-sized versions over a decade ago.  Target recently rolled out City Targets in Chicago, Los Angeles and Seattle, and Office Depot has designed stores to sell 4,500 items, half their typical inventory.

4.  Brands are re-tooling.  New brands are challenging the established brands, pushing some of those brands to re-tool and reinvent.  Tenant improvements and in-store re-design are must-have skills for retail designers.

5.  Know your malls.  Outlet malls with name brand anchors are going strong.  Outside the very dense metropolitan areas (D.C, New York) standard consumer malls are currently built out, or even over built.  The big trend - the fastest growing segment of retail real estate in America - is the Hispanic Shopping Mall.  It's phenomenal!

 

Looking to serve 50 million US Hispanics, these popular malls are coming into their own in California, Arizona, New Mexico, Texas, Oklahoma and other mostly southern states.  Savvy developers are actively mining this new niche with a spending power expected to reach $1.3 trillion by 2015.  Read more in Part II of this blog next week:  Retail Gold Rush – Hispanic Purchasing Power becomes a Major Player.  –

 

Craig Slocum, AIA is a principal with CSHQA and a leading retail designer for the firm.  National clients include Buffalo Wild Wings, Ling & Louie's, Albertsons, Safeway, Moxie Java, Dutch Bros., Walgreens, KeyBank and T-Mobile.