Mall Magazine wrote this article as a result of an interview with Neil Whitehead, managing director of Stuff International Design, London, UK and was published in both English and Russian.
The main yardstick of success for a Russian developer, it is now believed, is model of the European shopping centre. However, we have quite a nominal idea of what are these western – most often European – standards. Besides, in the young Russian market, which is far from saturation, most are not yet relevant. And one understands clearly what the West is aspiring to at present, some stages of evolution can be successfully bypassed.
The first Western shopping centre, such as Burlington Arcade in London and Providence Arcade in Rhode Island (USA), began to emerge in the first half of the 19th century. However, the idea of bringing all retailers to one site was considerably developed only in the 1950s thanks to Austrian architect Victor Gruen, who successfully implemented it in a few major American cities: Northgate Mall (Seattle), Northland Shopping Centre (Detroit), and Gulfgate Mall (Houston). All the centres were originally open passages represented by vaulted arcades with stores; Gruen transformed them into covered mall centres. The first post war shopping complex, the Southdale Center, designed according to Gruen's idea was built in the state of Minnesota in 1956 and became the first centre of the type in its region. This is how the new type of shopping centres – large suburban retail parks – was initiated.
If we compare the commercial real-estate markets in Great Britain in the first half of the 20th century and in Russia in the 1990s, we can find many common features. At that time, Britain was an industrial country with a low standard of living and population that rarely went abroad. In the early 1960s, the situation changed fundamentally: with the extensive spreading of the loan system, customers acquired an almost unlimited access to cash, which brought about a swift increase of the population's well-being. One can distinguish several stages of evolution in the development of shopping centres, both in the West and in Russia.
In the 1970-80s in Great Britain (in the past 8-10 years in Russia), there was a period of rapid growth in the number of shopping centres. The main task of such centres is to provide customers with a decent choice of convenience goods. The shop floor is arranged in the following way: two anchor lessees are placed at opposite ends of the main arcade, and the arcade is filled with fashion retail. Brent Cross in London can serve as an example.
In the 1980s, a new age started for most English shopping centres. As the socio-economic situation in the country was improving, there emerged a need for the shopping centres which would not just provide customers with common goods, but would also satisfy their needs for self-expression and demonstration of their success in life. Style and image came to the foreground, thus producing a grandiose parade of brands names. It was during this period that the legendary shopping centres John Lewis, Selfridge's, Debenham's and Whiteley's opened in Great Britain. Moreover, intensive penetration of the food industry into shopping centres was happening at this stage. The late 1980s were marked by a wide spread of shopping and entertainment centres. By engaging such anchor lessees as movie theatres, restaurants, bars, and attraction parks, those shopping centres acquired an opportunity to offer visitors both shopping and entertainment.
An excellent example of such a centre is the Mall of America in Minneapolis (USA). This complex was opened in 1992 and admits over 40 million visitors annually, which is approximately eight times the population of the entire state where it is located. The Mall of America ranks first in the United States by total area, which amounts to 390,000 square metres. There are almost 20,000 parking spaces at the disposal of multiple visitors from other states.
As for Europe, one should mention Odyssey, an entertainment complex that was opened in 2001 in Belfast; under its roof, besides stores, there is a collection of all kinds of entertainment, including a multiplex, 3D movie theatre, bars and restaurants, and even a mini science museum! However, the main theme of Odysey is that it has the biggest covered stadium in Ireland, which seats 14,000 spectators.
The retail park Blue Water to the east of London is another example of how a shopping centre can turn into a place of interest, which annually attracts 27 million visitors. The complex, located in a former limestone open pit, is the second largest in England and one of the biggest in Europe. Its shop floor (150,000 square metres) includes 330 stores, a thirteen-hall movie theatre, and over 40 cafes and restaurants.
For present-day shopping centres, it is not important 'who you are', but 'what you eat' and 'whom you communicate with', that determines both the retail mix and the entertainment within the shopping centre to a great degree. Contemporary customers are attracted not by just a brand name or trade name, but by their philosophy and the values they carry. They do not seek goods created by a famous designer, but buy items of good quality at affordable prices.
In today's Great Britain, much attention is paid to trade ethics. Such concepts as 'fair trade' and 'organic' come to the foreground. More and more retailers show an interest in healthy products that do not harm the environment. The precondition of this trend was created by the seizure of the market by international chain hypermarkets, which brought about the ousting of small grocery stores from the commercial arena of Great Britain. It was becoming more and more difficult for the butcher's to compete with such food giants as Tesco, Sainsbury's and Asda. However, the British customer – fed up to his heart's content with tomatoes packed in plastic and synthetic bread – started missing markets, bakeries, and corner shops. Therefore, shopping centres will have to really work hard on the range of food-stuff in the future. Aiming at 'piece goods' will allow small producers and local brand names ousted from the main shopping streets to take their place in the market again.
The Whiteley's shopping centre can serve as the typical example of the latest trends in our commercial real estate. Its owners are now performing a large-scale reconstruction of the centre, but it is its positioning and philosophy which are changing most fundamentally. The turning point was replacement of McDonald's by the restaurant Le Café Anglais with a famous French chef: Where fast food reigned, there are now natural ingredients. High quality of dishes, and sophisticated lifestyle. As a result, the average receipt of the place is increasing; on the whole, it all aims at attracting a better-off customer and repositioning of the centre as more expensive. In terms of fierce competition, this trend is the indicator of general moods on the British shopping centre market.
It is still early to talk about such trends in Russia: McDonald's network is still growing here. The mentality of consumers changes much more slowly than the infrastructure of Russian cities. Nevertheless, the rate of its development lets us suggest the Russia is capable of catching up with the Western market within the next decade. The major task for developers of Russian shopping centres consists in modernisation of malls and bringing them to the European standards. This will allow increasing the flow of foreign investments into the area of Russian retail, as well as allowing both attracting foreign investments into the retail mix and selecting the most appropriate ones for each specific centre and the local market on the whole.
MALL MAGAZINE, June 2008