Calgary is a city built on the success of the oilpatch.
When the oilpatch is booming, the city feels the impact in a positive way in many different areas including the retail industry. But when the oilpatch is struggling, that ripple effect is a painful one for retailers as less discretionary spending takes place.
The CORE shopping centre, which spans three city blocks in the heart of Calgary’s downtown, knows the ups and downs of the oilpatch very well over the years and is closely tied into that economic cycle.
When oil prices collapsed in the latter half of 2014, it led to two recession years in Calgary in 2015 and 2016. And as always happens historically, thousands of jobs were shed by corporate Calgary with its head offices concentrated in the core. However, the economy began its slow rebound to recovery in 2017.
“We’re actually coming out of a fantastic 2018 heading into hopefully another strong year. In 2018, we are up in almost everything. In traffic, in sales, in gift card sales. So we’re really excited,” said Allison Onyett, marketing director for The CORE which is managed by Cushman & Wakefield Asset Services.
As of the end of August, The CORE was sitting at a 6.4 per cent increase in traffic year-to-date with some months being up as much as 20 per cent over last year. Gift card sales were 68 per cent higher this year year-to-date than last year. Weekend traffic increased in 2017 by 8.8 per cent and the shopping centre is maintaining that increase this year.
“It is positive. However the numbers are still not those pre-recession numbers. We’re up over previous years. We’re still struggling to get to that pre-recession time. We were definitely affected by the layoffs in downtown Calgary. The downtown workers is traffic that is constantly passing through and as soon as you lay people off in the downtown core that is having fewer people walking through our centre every day,” said Onyett.
“So we’ve had to work really hard to come up with a marketing strategy that is event based, weekend based and engaging to further drive that traffic in from the suburbs that wouldn’t be here just because they’re working here but actually are coming to The CORE as a destination.”
The CORE has about 560,000 square feet of retail space.
“We are sitting at about a 20 per cent vacancy with permanent tenants. We’re actually almost fully leased coming into the fall here with a mix of both permanent and temporary tenants,” explained Onyett. “Some of them will come in just for the holiday season or some will be here for even a year or two. That’s still considered temporary. We’re actually running out of space to put some of these stores.
Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate in Calgary, said The CORE shopping centre with its anchor department stores is one of the largest enclosed shopping centres of any city centre, of a market with under two million people, in North America and attracts millions of visitors every year.
“Holt Renfrew and La Maison Simons anchor The CORE and provide a powerful draw to the project and the surrounding retail centres such as Bankers Hall and Scotia Centre. Downtown Calgary with close to 30 per cent office vacancy has affected the customer footfall, retail sales and vacancy levels at The CORE. Recent proactive landlord leasing strategies leading to retiring less productive retail tenants in favour of more current and up-to-date retailers is paying off with higher sales productivity and encouraging increases,” said Kehoe.
“The 2017 opening of La Maison Simons at The CORE has been a solid attraction and addition with their success especially on the weekends which is encouraging. As the office sector goes so goes The CORE and tenant retention and attraction challenges will continue.”
Onyett said the most significant addition to The CORE is Simons which opened in March 2017.
“We’re definitely feeling what we call the Simons effect. We’re seeing an increase of traffic. We did a survey in the mall and 31 per cent of our shoppers indicated that they were here specifically to go to Simons,” added Onyett.
The mall along pedestrian-friendly Stephen Avenue begins at Simons at its east end and continues to the west end with Holt Renfrew.
“What’s nice about us and it’s truly Canadian of us is that we’re anchored by two Canadian retailers. Simons on one end and Holt Renfrew on the other,” she said.