The future of the strip mall: downhill
Suburban strips with huge parking lots are losing favor, thanks to economic shifts, rising gas prices, and more appealing pedestrian-friendly town centers.
City of Burien
For more than 50 years, retailers have favored the commercial strip: a linear pattern of retail businesses strung along major roadways characterized by massive parking lots, big signs, box-like buildings and a total dependence on automobiles for access and circulation.
For years planners have tried to contain and improve the strip. Now they are getting help from consumers and the marketplace. The era of strip development is coming to an end. Evolving consumer behavior, changing demographics, high-priced gasoline, Internet shopping — are all pointing to a new paradigm for commercial development.
Commercial strips are not going to disappear overnight. But it is becoming increasingly clear that strip retail is retail for the last century. The future belongs to town centers, main streets and mixed-use development. Here is why:
We're overbuilt on the strip
From 1960 to 2000 there was an almost tenfold increase in U.S. retail space, from four to 38 square feet per person. For many years retail space was growing five to six times faster than retail sales. Most of this space came in the form of discount superstores on the suburban strip.
The recession proved that we have too much retail. Strip centers are now littered with vacant stores. By some estimates, there is currently over 1 billion square feet of vacant retail space, much of which has to be re-purposed or demolished.
Retail is moving back to the city
Wal-Mart in late 2010 announced plans for its first-ever stores in Washington D.C. To make the new stores fit an urban environment, the company has agreed to consider an array of new layouts, designs, and parking arrangements.
The store planned for New Jersey Avenue illustrates Wal-Mart’s new approach. The company plans a store of 75,000 to 80,000 square feet (much smaller than usual) on the ground floor of a five-story mixed-use building featuring 315 apartments, underground parking, and space for small retail stores.
At the same time that Wal-Mart and Target are planning new urban stores all over America, as many as 400 former big box stores sit vacant on commercial strips. Most analysts agree that urban neighborhoods are the new frontier for retail: the one place left with more spending power than stores to spend it in.
Traffic congestion, fuel prices and design are problems for the strip
Americans value convenience, but the perceived convenience of the strip has been reduced as traffic congestion has worsened in recent years. Add to this the rising price of fuel and an overall physical environment designed for cars, instead of people, and it’s understandable why fewer people want to shop the strip and almost no one wants to linger.
Town centers and Main streets provide a “place-making dividend” that the homogenous blur of the strip can’t match. They also provide a “park once” environment that will grow in importance if fuel prices rise. Just imagine what will happen to strip development if gas prices hit $5 a gallon or more, as some analysts predict.
The economy is restructuring the retail landscape
The recession saw the collapse of numerous big box chains, like Circuit City and Linens 'n Things. This helped send vacancy rates soaring. After three years on the brink, consumer confidence has improved, but we can expect a new normal when it comes to retail spending. Why? Because unemployment remains high, the days of unlimited credit are over, and many analysts predict that a “new consumer frugality” will be the norm for years to come. What’s more, strip centers without anchors (like grocery stores) and Class B malls are virtually unfinanceable according to many experts.
We’re also moving into an era of hybrid shopping centers. Big boxes are moving into the mall, and many malls will more closely resemble ol-fashioned main streets. Already, seven of the 13 regional malls in the Denver metropolitan area have — like Belmar in Lakewood, Colorado — been turned into mixed-use town centers.
Time-constrained lifestyles and boredom with the dull sameness of most strip centers has meant a slow but steady decline in the number and length of stays at strip malls. People go to get what they want and they leave. A pleasant (i.e. cool) atmosphere is particularly important to the GenY generation. A mixed-use town center with street life, outdoor dining, places to hangout and window shop is much more likely to attract the affection and the dollars of young shoppers than an auto-dependent strip.
E-Commerce means fewer and smaller stores
Today, the nation’s “healthiest” retailer is not Wal-Mart or Costco. It is Amazon. Amazon has exploited the increasing availability of broadband Internet and mobile technology to build a retail superpower. One of the biggest reasons why the strip is coming to an end is because bricks-and-mortar stores are becoming a smaller part of the retail landscape.
First, it was catalog shopping; now it is e-commerce, social media, and mobile phones. This means that retailers will seek smaller footprints as merchandise categories move to online channels. For example, the rise of Netflix and streaming video means the inevitable end of bricks-and motor video stores. E-readers portend the end or at least the downsizing of bookstores; ditto for music stores, Hallmark card stores, and other merchandise categories.
None of this is meant to suggest that we won’t still have neighbor centers with grocery stores, drugstores, coffee shops, etc. We will. But the endless expansion of the commercial strip — that homogenous blob of sign clutter and asphalt that leads out from every town — is reaching the end of its useful life. A new paradigm is being shaped, not just by regulation but by consumers and the marketplace. Commercial strips (i.e. road towns) with no beginning and no end, with no center and no way to get around except by car, are becoming obsolete in an era of shrinking stores, rising gas prices, discerning consumers and online shopping.
Distributed by Citiwire.net.
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Comments:
Posted Sun, Feb 13, 7:11 a.m. Inappropriate
As long as urban downtowns like Seattle insist on raising hourly parking rates above the cost of a gallon of gas, people will shop at strip malls and suburban shopping centers. As long as urban downtowns like Seattle do not control crime, tax rates, service businesses will be enticed to move to strip malls and suburban shopping centers. As more and more service businesses leave or are driven out economicly by urban downtown cores like Seattle, they will flee to be closer to where the people live and the local governments are more business friendly.
Posted Sun, Feb 13, 10:04 a.m. Inappropriate
So people use less gas by driving to a shopping mall or "town center" than by driving to a single store on an arterial? well, maybe so, but we are not talking about significant savings are we? and the congestion? I think both shopping modes involve roughly the same aggravation factor. On-line selling benefits by not collecting sales tax in many states and that advantage may well be significant; let's see what happens if Amazon's customers all pay sales tax. I think that (eventually) has to happen. I think you ignore the obvious convenience of the big box store that consolidates one's shopping chores; they may occur in a "town center" or they may be in a stand-alone parking lot somewhere. If you are buying a lot of stuff you need your car, whatever is closest is going to win, isn't it? it's just hard for me to see anything tectonic about a shopping center that (sort of) imitates a small town.
Posted Sun, Feb 13, 11:16 a.m. Inappropriate
Edward has some good points here. The next shoe to drop is the commercial real estate bubble. This shoe is dropping already, and you can see many vacant spaces in the strip malls. Bucking these trends are the city centers, especially the small towns scattered around king county. These downtowns are seeing a comeback.
The silver lining to all this are the businesses that eventually move into the strip malls. Many are very interesting: recent immigrant grocery stores, thrift stores, and cheap restaurants. Viva the new Americana!
Posted Sun, Feb 13, 11:44 a.m. Inappropriate
"The endless expansion of commercial strip — that homogenous blob of sign clutter and asphalt is (I agree) reaching the end of its useful life.
The Commercial strip with no beginning, no end, no center, and no way to get around but to drive is becoming obsolete in an era of corner stores, higher density development, concerns about gasoline consumption with rising prices. A new paradigm is being shaped by discerning consumers and the marketplace."
That about sums it up. Edward MacMahon is correct.
Suburban malls and strips have thee greater aggravation factor.
Better formulas for suburban development are forcing strips and malls to give up their parking lots for redevelopment.
5000 cars daily drive to Costco/Target/etc averaging 15-20 miles.
Average 25mpg cars. Makes 4000+ gallons gasoline consumed daily per unit warehouse retail. Suppose our average shopping trip distance is reduced to 10 miles cutting gasoline consumption in half. The same goods bought could be van distributed to more proximate retail outlets with about 200 gallons of gasoline, if my figures are correct. That's a ~40% reduction.
In Seattle's case, there may be no choice but to redesign the transit system. Build a better trolleybus for downtown. Other buses streamlined and connected to future LRT LINK, in the event ST gets its act together. Nice work on MLK, BTW,IMO,but missing Southcenter is Link's big mistake. Spur to Renton? Get south further than 200th park-n-ride nearer the college area. Mayor Mike, the light rail guy that the Big players don't like to talk to and don't like being told they're wrong. Dump the dbt.
Posted Sun, Feb 13, 11:58 a.m. Inappropriate
As for the ghost malls, here's the solution: Cheap artist's space. Just like the formerly (arguably still) decrepit warehouses in, say, Pioneer Square. But it's in the SUBURBS gasp the urban utopians. Hey, Pioneer Square and Belltown were part of an urban wasteland that rivaled anything in Detroit when I was a kid. That's why the space was so cheap...
Posted Sun, Feb 13, 11:59 a.m. Inappropriate
Mr. McMahon provides a beautiful picture of potential future trends but I must say that this piece is more about the vision of an urban planner and less about a study of statistical trends. I agree with Mr. McMahon, in that, the trend toward town and urban centers will be on the rise -- but not quite yet. As fuel prices drive housing and economic trends, this vision will become a reality. But for now, creating more density and mixed retail in urban centers remains the arena of demonstration projects and wildly enthusiastic urban planners. We are still a very large country with a population that is very separated geographically. The US still does not equal Europe in terms of spatial characteristics, a fact which planners love to marginalize.
Nice article to grease the skids though!
Posted Sun, Feb 13, 2:32 p.m. Inappropriate
The first step is to end the social engineering zoning that REQUIRES too much parking in most of the US, and REQUIRES that everything look how it does. Establish zoning that allows real town centers and mixed use to be built. Do this as the public transit improves.
The strip mall will never really die. A substantial percentage of people will always drive, and they'll go where it's easiest. But I agree that the dominance of strip retail is over.
Seattle doesn't see abandonment on the scale of many cities because we have growth management (the voted kind and the topographical kind). We tend to reuse what we have, rather than vacate and leapfrog to another greenfield farther out.
Posted Sun, Feb 13, 2:45 p.m. Inappropriate
Great pick for reading on Crosscut. Ed McMahon is one of our clearest voices on all topics related to saving cities and the scenic and historic landscapes that give us our identity as Americans. Thank you, Crosscut and thank you, Ed.
Grant Jones
Posted Sun, Feb 13, 3:53 p.m. Inappropriate
McMahon offers a beautiful picture of future trends with "I must say this piece is more the vision of an urban planner and less a study of statistical trends. I agree the trend toward town urban centers is on the rise -- but not quite yet. (Why not?) As fuel prices drive housing and economic trends, this vision will become a reality." (Oh. Market forces)
An economist should pose that question as clearly as possible.
Cross-county travel shrinks with township development.
Better understanding of building urban-style starts first. Starts now.
Mayor Mike is right, dbt doodoheads.
Posted Sun, Feb 13, 5:41 p.m. Inappropriate
Wells, I will agree that if average driving distance is reduced by 40% the fuel consumed would also drop by 40%. Your and the author's presumption is that the "town centers" are going to be closer (not just closer but 40% closer) to customers than the strip developments are. "Cross-country travel shrinks with township development"? do you have some township development in mind? an example?
Posted Sun, Feb 13, 8:36 p.m. Inappropriate
I detest the new shopping centers that are supposed to look all rural and small townish. They look plastic, and modern, and fake. And I don't shop there, other than the one at Mill Creek, but I only have ever been in the grocery store, and that's because I can park in front of the store.
Posted Sun, Feb 13, 8:41 p.m. Inappropriate
"rising gas prices", now there is an obsolete idea..
Posted Mon, Feb 14, 12:06 a.m. Inappropriate
I'm not sure that rising gasoline prices matter much. Say that the price does in fact rise to $5 a gallon. If your typical power-commuter travels 100 miles per day, including work, dropping the kids off at school, and shopping runs, on a vehicle that gets 25 miles per gallon, the total fuel cost is $7300 a year. A significant chunk of change, but enough to effect drastic lifestyle changes? A much larger sum of money would be the additional cost of living in an expensive city. It would still be cheaper to live in, say, Mill Creek and commute than to live in North Seattle. And that's really one of the driving forces, no pun intended, behind urban sprawl: the quest for cheap land.
Now, in all likelihood we have reached a saturation point, at which there will be little construction of new strip malls for some time. That's simply a matter of oversupply. And the glittering bedroom communities have no doubt lost of some of their luster due to the proliferation of vacancy signs. But the real question is whether that's temporary or permanent, and the answer probably depends more on cultural attitudes than on market forces.
I currently live in Forest Grove, Oregon. While some New Urbanist thinkers want to emulate the old small town feel, I am at the real thing. As a simple matter of personal taste, I like the environment, where there are good sidewalks, narrow roads, classy storefronts, and frequent community events. The fact that Forest Grove is a college town infuses a lot of life into the community, as does the activity of the old timers. But financially, it is struggling to survive. Main Street, just as much as the strip malls, struggles against the pressure of online retailing, and yes, the Wal-Mart that has just opened up at the edge of town. Wal-Mart might have a larger selection of goods at lower price, and so how much of a premium will I pay to be in a place that is enjoyable?
As I hop on the Tri-Met bus, heading east toward Portland, the next town is Cornelius. Cornelius is a severely depressed town, with a large, poor immigrant population, closed storefronts all over, and visible signs of decay. Economic forces there too have done their work on Main Street, and it isn't pretty.
So, if you want to know where retailing is headed, I don't think there exists a simple answer. Both the planners at City Hall and the planners in the corporate board rooms seem to have done an inadequate job answering the question so far.
Posted Mon, Feb 14, 8:20 a.m. Inappropriate
I remember, as a little kid growing up in the Tacoma area, when all the department stores were downtown. Rhodes, the Bon, People's, Sears, etc. They all lured customers by building large parking garages, especially Sears and Rhodes, which had skybridges connecting the stores to the garages across an alley. If major retail outlets are again going to move downtown, they'd better be ready to provide parking for their customers. Otherwise, they'll be catering to a small clique of urban dwellers while the vast majority of shoppers continue to go to the malls. Maybe it's just nostalgia, but I'd like to see the return of the downtown retail cores. Broadway in Tacoma has been on permanent life support since the Tacoma Mall opened. But the stores moved out of downtown originally for a reason: The customers found malls more convenient. I think malls are a pain in the proverbial butt, but the majority of shoppers voted with their pocketbooks in the 1960s and 1970s and malls won. I don't see any evidence yet of a major demographic shift that would once again favor downtown. But it's nice to dream.
Posted Tue, Feb 15, 8:42 a.m. Inappropriate
Keith. The town center development I mention most is along aLink LRT extension south closer to Federal Way, nearer the college. I also advocate for an LRT spur to Southcenter eventually through to Renton. This spur could extend west of Seatac Airfield to Burien. Then there's the BelRed corridor.
It's important to note that LRT systems enable station area commercial development ala the examples along MLK. Park-n-rides are also necessary, but do not generate near as much ridership nor direct as much redevelopment. The S.200th park-n-ride will not build sufficient ridership on the initial line, nor will the extension to UW.
Posted Mon, Feb 21, 3:13 a.m. Inappropriate
Texas is a state with a heavy marketing strategy. They are attempting to market themselves as a very business-friendly state. Here is the proof: Amazon and Texas duking it out over sales tax obligations A fight with Amazon, the online retailer, is throwing that characterization into question. The Comptroller of TX is ordering Amazon to pay back $600 million. That figure comes from the amount of money Texas believes Amazon has skipped out on paying in sales taxes.
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