Medieval markets vs the hypermarkets
Industry representatives gathered at the Shopping Center Forum in Warsaw last week to discuss the hottest issues in the sector.
Stephen Pragnell, president of the Polish Council of Shopping Centers, highlighted the controversial proposals by Self-defense (SO) and the League of Polish Families (LPR) to ban Sunday trading and new foreign investors from entering the market.
According to Pragnell, the drafts stem from the wrong concept of what a shopping center is in Poland. "In the proposals there's no mention about shopping centers or shopping malls, but only hypermarkets. There is total confusion. As far as I know, Arkadia is not a hypermarket, nor is Galeria Mokotów. They are galleries, places where people have human contact, fun, where they shop. They are like medieval marketplaces [for people living in the Middle Ages]," argued Pragnell.
Paying the price
He said that Poland's emerging market, with its high unemployment rate, cannot afford to accept the proposals. "The situation on the Polish market cannot in any way be compared with the French or German markets, as [SO] is doing," said Pragnell. Currently, the council is looking for the support of everyone working in the shopping center and retail business to work against the proposals.
The forum's participants focused on effective management. Laura Jolly, a professor in the retail and consumer department at Tennessee University in Knoxville, focused on anchor tenants as the strongest draw for customers and other tenants. Jolly identified Poland among the top 20 retail markets in the world, with strong growth and foreign investment expected in the sector in the future. She sees it as an attractive market for urban development and projects a shift in retail investments to smaller markets and different retail formats.
In the mix
Mike Simpson, director of Retail Group, discussed how tenant mixes can go wrong, and pointed to poor and obsolete design, a flawed vision of the project, short-term planning, badly constructed tenants' covenants and legal barriers as the most common culprits. According to Simpson, the tenant-mix value grows along with the size of the center, the number of units, the average unit size, the number of retail categories and brands present, the spread of the brand, and the efficiency of retail categories.
According to Robin Bevan, a director at the Javelin Group, the critical factor in successful tenant mix is a proactive approach to goods management. "We all recognize that developing a successful tenant mix is part science, part art. Successful tenant planning doesn't finish on the day when the doors of the shopping center open. It should be and must be an ongoing process, a proactive asset management of the existing scheme. It's all about understanding how to evolve the scheme for maintaining a close contact with both of the customer groups - shoppers on one side, and tenants on the other," he said.
