Shopping centres and their impact on retailers

Abstract

A shopping centre is a group of retail establishments which are operated as a single unit. This thesis examines the impact of shopping centres on retailers in their immediate vicinities and the means by which such impacts can be identified and explained. An impact can be defined as any change in the retail system which is a response to a shopping centre. About 78 shopping centres have been built in New Zealand since 1962 and their impact has been substantial. Shopping centres account for a significant percentage of retail spending. They also dominate key sites and have been instrumental in determining both the geographical and temporal direction of retailing. While anecdotal evidence of the influence that shopping centres are having is widespread, actual assessment of their impact is rudimentary. This thesis examines the effect of one major shopping centre on a local retailing system. In particular it examines the effect of the shopping centre on the manner in which individual stores operate and compete. It finds that a shopping centre has an impact on individual retailers by capturing trade from them, and by stimulating retailers to relocate their stores into or near to it. This study shows that the impact of a shopping centre is determined largely by its tenant composition. It is not so much a shopping centre's size, appearance, or convenience which determines its competitiveness, and therefore its impact on other retailers; but the types, sizes, and attractiveness of its individual tenants, especially since many of these are controlled by major retail chains. It is largely because shopping centres are the major distribution outlets of international and national retail chains that they have such a large collective effect on stand alone retailers. New shopping centres have been built and existing shopping centres have been redeveloped on a regular basis over the last thirty years. This continual construction and redevelopment has ensured that shopping centres continue to compete on the basis of novelty and efficiency. As a result their tenants are able to maintain a competitive advantage over more traditional store types found outside shopping centres.