Conestoga Mall in Waterloo, Ont., is the first Canadian shopping centre outside a major metropolitan region to see its annual sales per square foot surpass $1,000, according to the Canadian Shopping Centre Study 2018.
“We were very happy to see it on the list, especially given the company that it’s in,” said Roman Drohomerecki, executive vice-president and chief operating officer, retail at the mall’s owner Ivanhoé Cambridge. “It is a little bit unusual but I can tell you it’s what we do.
“We try to bring our assets to that level, regardless of where they’re located, but often it’s easier to get there when they’re in a big metropolis versus in a smaller market.”
The mall ranked 11th overall in the annual ranking with $1,016 in sales per square foot. Report author Craig Patterson said Conestoga Mall has “got a great grouping of stores,” adding “it’s considered more of an upscale look.”
Patterson, a retail analyst, and founder and editor-in-chief of Retail Insider, created the report for the Retail Council of Canada.
New retailers at Conestoga Mall
Newer additions to the mall’s 25-store expansion include heavyweights such as Apple, Lululemon, Aritzia, Indigo, Saje, Sephora, and a revamped H&M. Ivanhoé Cambridge has invested about $47 million into improvements during the past few years.
For both residents and local students (the region is home to two universities as well as a college), “they’re not going to Toronto to shop, or at least they don’t have to,” Patterson said. The investment is paying off.
“Our traffic is up dramatically since the addition or expansion of those tenants,” said Drohomerecki. “It’s up 17 per cent since that expansion opened . . . which is really exceptional in a market where traffic is flat to modestly improving. So, it speaks to the fact that those additions have really resonated with our shoppers.”
A Shoppers Drug Mart opened last month and “they’re telling us that they’re the only store that’s carrying Chanel in the market, which is another indication of what that market is calling for,” Drohomerecki said.
The Indigo expansion opened in November. Later this year, a Pickle Barrel restaurant will join the mix, in addition to a 19-km light rail transit (LRT) line linking Conestoga Mall to Fairview Park Mall in Kitchener.
Conestoga Mall also just missed a Top-10 ranking in the survey — by one dollar per square foot. Ottawa’s downtown CF Rideau Centre was 10th with sales of $1,017.
Nonetheless, in Waterloo the $1,016 sales total is an 11 per cent increase in productivity from 2017’s $919.
Hitting milestone “an evolution”
“I would say it’s more of an evolution,” than a shift in strategy, Drohomerecki said. “Getting a project to $1,000 a foot-plus, I think, is a real process and it truly does take a village.”
That includes everyone onsite, from leasing, operations and marketing to redevelopment and construction groups.
“I think everything starts with the shopper, so despite the fact that this is, you know, a $1,000-a-square-foot-plus shopping centre, we still view it as being an integral part of the community. So essentially, what we need to do is understand what the community is looking for.”
That involves conducting focus groups, surveys and listening to people in the trade area to “truly try to hone in on what they’re looking for . . . once we get that information, we can try to satisfy their needs.”
Surveys say shoppers are seeking engaging experiences which combine shopping and entertainment.
“That’s the logic behind how we’ve dealt with the Target space (vacated when the U.S.-based chain shut down its Canadian operations) and how we typically deal with marketing a project,” said Drohomerecki.
In addition, non-traditional services and offerings are important to Waterloo shoppers, as is corporate responsibility and sustainability, he added. Variety is desired, including pop-up stores.
“Everyone is searching for the holy grail,” said Drohomerecki, “and everybody is trying different things in different places . . . some with a lot of success, some with a little bit of success.”
Conestoga Mall and Ivanhoé Cambridge
Conestoga Mall currently has 131 stores and a total gross leasing area of 659,026 square feet. Ivanhoé Cambridge became the managing partner and a co-owner of Conestoga in 1977, and fully acquired it in 1991.
Through subsidiaries and partnerships, the company holds interests in more than 1,000 properties, primarily in the residential, office, retail and logistics real estate sectors.
Conestoga Mall tallies roughly 6.3 million visitors each year and its demographics are telling.
“It’s a very highly educated trade area, so we’ve got a couple of universities and a college,” said Drohomerecki. “So the people who live there — our shoppers — are younger. In fact, we’ve got a higher proportion of millennials than any of our other properties.”
Engaging this group has been instrumental. Drohomerecki cites a 2018 exhibit at the City of Waterloo Museum — next to the mall food court — called Tales of Fantasy … Our Myths and Legends, which was on its customers’ wish list.
There have also been a series of virtual events.
Interactive events, other activities
With the opening of SportChek, “there were all kinds of clinics,” Drohomerecki said, adding you could learn about hockey, volleyball, basketball, soccer, and even practise taking shots. “For the older kids, we brought in a chill zone, so once again they could kick back with virtual reality and watch a Cirque (du Soleil) show or maybe meditate, or for that matter, maybe have a massage from therapists.”
Public art exhibits are also part of the plan, and “the whole intention is to try to tie ourselves into the community . . . into what our shopper might be interested in,” Drohomerecki said.
Conestoga Mall’s specialty leasing group is piloting the addition of BitCoin machines.
“That’s the sort of thing that resonates with a young, tech-savvy shopper,” said Drohomerecki. “So, you’ll be able to buy and sell crypto currency at Conestoga.”
Complacency isn’t in the cards for bricks-and-mortar retailers.
“Our reality is we need to continually reinvest in our assets,” said Drohomerecki, adding that encompasses organic growth, experiences and new tenants or brands. “You just can’t sit back. We’re in a very, very competitive marketplace, and not just with other malls.
“We’re competing for those experiential dollars.”
Toronto’s Yorkdale Shipping Centre topped the CSC study with $1,905 sales per square foot, a 15 per cent increase year-over-year. CF Pacific Centre and Oakridge Centre in Vancouver ranked second and third, with $1,690 and $1,594, respectively, in sales.