Mall meets big top

for cirque storyIt’s already become a bit of a cliche that retail landlords are redefining their properties as ‘shop, eat, play (and live)’ facilities – all part of the sloganeering around the next evolution of the venerable old shopping centre.

It’s been underscored by the announcement that Cirque du Soleil – the Montreal-based acrobatic spectacular – was to begin rolling out “family entertainment centres” in indoor shopping malls.

The somewhat clunkily-named “CREACTIVE” centres will average about 24,000 square feet and give visitors the opportunity to experience Cirque du Soleil from the performers’ perspectives – instead of watching passively, visitors will be able to try a variety of gymnastic activities, including acrobatics,  bungee jumping, parkour, trampolining and juggling.


The first of Cirque du Soleil’s CREACTIVE units is planned for opening at Vaughan Mills, a value megamall located about 30 kilometres north of the Toronto CBD, in September 2019. The company is in discussions with other mall landlords for more locations in North America and beyond.

Although tenants like Cirque du Soleil, such as skate parks, playgrounds and climbing facilities, usually pay lower rent than conventional retail stores, they are helping to move shopping centres to higher ground, where they are more insulated from e-commerce and from the shift in consumer spending away from traditional retail merchandise.

The cache attached to Cirque du Soleil brand is so strong that CREACTIVE centres have the potential to be a major coup for shopping centres, initially in North America where regional malls have been rocked by falling traffic and a superabundance of obsolete department store store anchors and specialty apparel shops.

Deborah Weinswig, CEO of New York-based Coresight Research, an authority on global retail trends, predicted in a recent research note that more than 1,100 department stores will close in the US alone over the next five years.

She also forecasts that e-commerce sales of apparel will double during the same period.

Weinswig, who reckons that 30 per cent of America’s regional shopping centres are performing so poorly that they need to be shuttered, nonetheless believes that malls as a genre have a future so long as they can ride the trend away from merchandise spending toward a more dynamic “retail-and-services ecosystem”.

Entertainment tenants like Cirque du Soleil will help to significantly lift both pedestrian traffic and meaningful occupancy, but it will essentially be a ‘destination’ tenant that – food service excepted may not do much for the other mall stores.

Vaughan Mills, site of the first CREACTIVE space, has its 120,000 square metres of gross leasable area already loaded up with such destination tenants, including a Legoland Discovery Centre, Pro Hockey Life and Bass Pro Shops Outdoor World.

These are teamed up with about 250 outlet and value-oriented stores in a formula that generates annual sales per square metre of just under CAD$8,500 (A$8,700).

Although it bills itself as a super regional shopping centre, it isn’t really, at least not under conventional definitions, since it has no department store, no supermarket and the vast majority of its in-line stores are outlets.

As such, it may not be a good bellwether of how CREACTIVE might function for the betterment of its co-tenants in a more conventional shopping centre.

Either way, interest in the concept among landlords is likely to be intense.

Not the cure

Still, entertainment in this kind of format will not cure all of the headaches that landlords are suffering as they scramble to retool their properties in the digital and millennial age.

In the US, Weinswig estimates spending on discretionary services as a percentage of all discretionary spending has increased by a hefty 2.0 per cent since 2010.

In Australia though, the change during the same period hasn’t been quite so pronounced (less than one percent).

In particular, there has not been a particularly strong upsurge in spending on entertainment services.

In fact, in Australia, entertainment spending has grown at approximately half the rate of total consumer spending so far this decade.

The really strong growth in services has been occurring in categories that are largely non-discretionary and inflation-prone, such as housing and utilities (5.1 per cent annual average growth), health (6.3 per cent), education (7.4 per cent), and insurance and financial services(5.8 per cent).

It hasn’t been helpful to either retailers or the Australian economy in general that some of the most rapid discretionary spending growth during this decade has occurred in spending by Australians travelling overseas (5.2 per cent growth per year on average) and gambling losses (4.2 per cent). Australians blew $26.5 billion on gambling last year alone, in their usual spectacular ignorance of the laws of probability.

To their credit, the data on services spending has not gone unnoticed by shopping centre operators, who are bulking up their projects with banks, medical facilities, gyms and healthier food options.

There is still a lot of low-hanging fruit, however, particularly in areas like education, whose introduction will help with the great transformation occurring in the shopping centre industry.

Meanwhile, exciting entertainment concepts like CREACTIVE may soon make their appearance. With compelling entertainment choices (save cinemas) still lacking in most of Australia’s large shopping centres – the circus can’t arrive a moment too soon.

Michael Baker is a Sydney-based retail consultant and former head of research at the International Council of Shopping Centers.



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