It’s that special time of year where we celebrate love and romance through a medium of gifting trinkets like road-side flowers and overpriced boxes of “faux-fancy” chocolate.
This year, like all other years in recent memory, the Oshawa Centre mall will no doubt become a hub of frantic retail activity leading up to the holiday.
When it’s over, shelves at Purdy’s and Laura Secord might look like those of a Florida-area mega-mart shortly before hurricane Irma struck the ‘sunshine state.’
Usually, the Hallmark card store only has Valentine’s Day cards “from grandma to pet cat,” or something similarly obscure. It could take a week for some overexerted florists or sales reps at Pandora to fully recover.
Those dazzling shopping centre crowds, not just those in Oshawa, might make Canadian malls seem like retailer utopias—perfect environments for businesses to ensure a steady flow of customers with lots of disposable cash.
While this may be accurate on a few select days of the year, much of the time the opposite is true, and economists seem to agree that the trials and tribulations of Canadian malls are far from over.
At this year’s annual International Council of Shopping Centres conference in Whistler, one of the most significant topics of discussion will be the effect of online retail giants like Amazon on the traditional mall structure, as shopping centres in the United States go through a so-called “retail apocalypse” due to online competition.
Martin Qui, professor of marketing at Laurier University, told The Waterloo Record, “The mall is no longer a popular destination for people to spend their leisure time. They have better ways to kill time.”
Like several others, Qui pointed to online sales as a factor in Canadian’s apathy toward shopping centres. According to Qui, online retail accounted for nearly ten per cent of all retail activity in Canada in 2016, and with more online retailers doing business here, he believes those numbers are set to rapidly increase.
With online retailers offering intense discounts leading up to holidays, perks like free shipping and gift-wrapping, and a larger selection than in-store, customers are taking their business to the world wide web.
Who really cares if they can’t see what their buying or try it on, most sites have easy return policies anyway.
James Smerdon, Vice President of Retail Counselling at Colliers International Councilling, told BNN in October, “The small-market suburban Canadian mall is in trouble, and has been since Target replaced Zellers.”
Target’s opening in the Canadian market in 2013 placed the blazing-red esthetic in North Oshawa’s soon-to-be-demolished Five Points Mall, at the site of a former Zellers.
Then, just two years later, the company’s shock announcement that they were shuttering all 133 locations left residents wondering about the future of the enormous space as one of two ‘anchor stores’ in the Five Points.
Ultimately, the mall never recovered, and announced closure last year. Sure, people will tell you that the financial problems at Five Points started long before Zellers even ordered their black and yellow “STORE CLOSING SALE” signs.
In the end, the gaping hole Target left sucked the remaining life out of the aging facility, and was the ‘Judas kiss’ for the site.
The Oshawa Centre had a Zellers at one point too, but never converted the space to a Target. Instead, they initiated a sweeping, multi-million dollar renovation of the entire mall, which was completed at the end of 2016.
The mall added 375,000 square feet to the floor space, but even today several units remain empty.
Shoppers are confused as certain stores go out of business mere weeks after their grand opening sales. According to mall employees, foot traffic is up, but people just aren’t spending money.
Another ‘bad omen’ for the mall is the new addition of its very own gaping hole—the site of the former two-story Sears. Mall brass will have to work hard to plug the cavity before it does any lasting damage to nearby stores.
Still, there are few options of viable tenants for the mall to lure into the space.
Most retailers couldn’t fill such a sizable store. There is already a Wal-Mart and grocery store within walking distance to the mall.
Potential may exist for converting the space to an event space or community centre, but those require tedious commitments from the (already financially-strained) local government.
Finally, one would be remiss in recounting the woes of local malls without mentioning the minimum wage increase in Ontario. Since most retail employees are paid minimum wage, staff costs for businesses are on the rise this year.
While big businesses such as ‘H&M’ and ‘Forever XXI’ could survive with that hit to their bottom dollar, it wouldn’t be wild to wonder if unprofitable stores (and their employees) could be on the chopping block as retailers move to save money and focus more heavily on e-commerce.
After all, if Lowblaws is any indication, businesses are ready to make the switch; the grocery store giant announced last November it was closing 22 unprofitable stores while launching a major online order service in the Toronto-area.
The Canadian shopping centre industry must overcome major hurdles if it is to survive in an increasingly competitive and uncertain market. Stores can’t survive on booming sales during select times of the year, and a handful of customers for the remainder.
This week and next, people will make their semi-annual trip to the mall to purchase one or two items, never to return until Christmas bells ring. Every holiday shopping season at the Oshawa Centre, scores of people dance around repeating the same tired line: “I haven’t been here since last year!”
Until one day, they just stay home and ask their Amazon Echo to order some artisan dark chocolates from Belgium with free overnight shipping while they do their laundry.