Considering the unprecedented rise of e-commerce options, coupled with the worse provincial recession in decades, one might think that retail sales have plummeted. However, there’s recent data from the Retail Council of Canada that suggests shopping malls have weathered the storm quite well.
Southgate Centre, West Edmonton Mall, Kingsway Mall, Edmonton City Centre and Londonderry Shopping Centre make up the top regional malls in Edmonton. The first three in that group release information on how productive the stores are on average. Using metric of “sales per square foot”, the shopping malls provide an indication on what the average revenue for every square foot of sales space. For simple math, if a mall was 100,000 square feet, and all the stores combined did $50M in yearly sales, the sales per square foot would be $500 ($50M / 100,000).
In 2016, the sales per square foot for the malls were as follows:
Southgate Centre: $1,155 (made it the 5th most productive mall in all of Canada);
West Edmonton Mall: $745 for non-anchor CRU’s and $1,175 for the main corridor;
Kingway Mall: $704
In 2017, the sales per square foot on Southgate and Kingsway saw a modest decline:
Southgate Centre: $1,147 (maintaining its top 5 ranking in Canada);
Kingway Mall: $689
Interestingly, West Edmonton Mall saw a small increase with $760 for non-anchor CRU’s and $1,178 for the main corridor. Rec Room, which has a successful location already in South Edmonton Common, just opened a second Edmonton location in West Edmonton Mall.
Londonderry Mall in north Edmonton will also be an interesting mall to follow. They recently completed an extensive renovation and added another anchor tenant with La Maison Simons (~ 100,000 square feet).
In short, malls have performed quite well through the recession. We’ve also seen oil prices start rising towards $70 / barrel (WTI:$USD), so that should be a positive for the market as a whole. While there are always external pressures, we are optimist that 2018 will be a good year for the economy.