Discount retail chains are moving into mall openings vacated by ailing department stores and other traditional mall retailers.
According to a report from Reuters News Agency, “Bargain store chains are flooding into North American malls and shopping centers like never before, upstaging old mainstays like J.C. Penney and Sears that are reeling from the one-two punch of an ailing economy and competition from online stores.”
The reports says that though Penney and Sears are retrenching, and Staples and RadioShack are closing thousands of stores, shopping center owners “are getting help from a stable of discount retailers. Costco, T.J. Maxx, Marshalls, Dollar General, Nordstom Rack and Ross Stores have been quick to fill the vacancies.”
Deep discounters, in particular, are thriving, “Dollar stores have just had insane, insane levels of new growth,” said the report. “Dollar General has more than 11,000 stores, with plans to open several hundred more in 2014. The chain has more stores than RadioShack and Staples combined.”
Dave Henry, ceo of Kimco Realty Corp. (New Hyde Park, N.Y.), North America's largest owner and operator of neighborhood and community shopping centers, said recently his company “can absorb hits from consolidation in the office supply industry by signing up tenants such as T.J. Maxx and Marshalls, and specialty grocer Sprouts, for example.”
In fact, Henry said, “new store openings are at a five-year high. So even as these [traditional mall chain retailers] consolidate, the demand for these bigger box [spaces] is good and strong, and rents are beginning to jump.”