Shopping Center Unrest - the Battle over Leases

Shopping Center Unrest: The Battle Over Leases

Q3Pros and cons of replacing a traditional department store with a Target or Costco

Anchors point of view: Pros: Would provide a broader and a deeper assortment of shopping goods and services for the consumer. It would reduce the overall competition in their target market but eliminating a competitor in their specific area of goods. They would fill the replacement space and would share the cost of rent and payments to merchant Associations, depending on agreements. Might ease consumer boredom by providing a different level and variety of products or services and might create more traffic and a willingness to stay longer.

Cons. Stores like Costco and Target appeal to a different consumer group and other anchor store may feel that, discounters will tarnish their image. Although they may increase traffic, customers like to compare prices, styles, selections and services of similar stores, which will change with Target and Costco. People will not linger long but will most likely go to one or the other

Q4) From developers Point of View:

Pros: Because of mergers and a decline in traditional department stores there is less to choose from, and so the developer will welcome anyone to fill the vacancy and pay rent, share common costs and other expenses. They will generate customer traffic, and help provide one stop shopping by providing complimentary offerings.

Cons: Because of REAs developers’ replacement choices are limited, and the other stores have a say in who will replace tenant vacancies, creating an gray area, that would increase antagonism and litigation as seen with the May Co.. Also the choice of Target or Costco might discourage customers, who want similar stores to compare, from lingering, might hurt the smaller stores.