The Conestoga Mall in Waterloo, Ontario, is the first shopping centre in Canada not located within a major metropolitan region to see annual sales per square foot surpass the $1,000 benchmark.
The Canadian Shopping Centre Study 2018, by the Retail Council of Canada, listed Conestoga as number 11 on the list of top productive malls in the country with sales per square foot at $1,016, up by 10.55 per cent from $919 the year before.
“Getting a property to $1,000 a foot is a pretty huge task and if you look at some of the properties we’re very proud to be on the same list as they’re big urban or solid suburban animals,” said Roman Drohomirecki, Executive Vice President and Chief Operating Officer, Retail at Ivanhoé Cambridge which owns and manages Conestoga.
“I don’t need to tell you how quickly evolving competition is for consumers these days. Everybody is trying to get a piece of share of wallet and we’re just discovering over time that in that kind of landscape we need to deliver a unique and engaging experience for the shopper – giving them a reason to come off their couch and come to visit us.”
The Conestoga Mall has total gross leasing area of 659,026 square feet with 131 stores. Drohomirecki said the company sees the mall as an integral part of the community.
So to ensure its success – and this applies to all of the company’s properties in Canada – Ivanhoé Cambridge tries to understand all there is to understand about its shoppers – who they are, where they come from, what are they looking for, how do they want to be communicated with. With that knowledge in place, the mall owner can then respond to consumer needs.
“That might be experiences. That might be amenities. That might be the brands that they desire,” said Drohomirecki, adding that in the case of Conestoga, the mall is riding along with a growing community.
According to Ivanhoé Cambridge, Conestoga is a premier regional centre that caters to young, educated, affluent residents. The centre attracts 6.2 million people each year and offers the area’s only Apple, Bench, H&M and Pink stores.
The mall’s success is its location in part of the highly desirable area known as Canada’s technology Triangle.
“The market boasts a thriving, diverse economy, a strong growth rate, young, educated, affluent residents and is also home to 100,000 post-secondary students,” says the mall owner.
Its location directly adjacent to the area’s major arterial highway gives the mall great access and visibility.
“It’s a pretty special place. The trade area is extensive but maybe more importantly it’s situated in an area that’s recognized for the concentration of tech-focused companies and insurance firms not to mention a couple of universities and a college,” said Drohomirecki. “So that area is cranking out software engineers. In fact, it’s known to have the highest number of startups in Canada. So what often happens is these tech companies recruit the graduates right off the campus and they end up staying in Waterloo.
“Consequently we’re part of this rapidly growing community where there’s a high proportion of technology and white-collar jobs. Half our shoppers in that building are Millennials. That’s not the case across our portfolio anywhere. We’re about to get an even bigger boost here because the LRT line will be coming to our mall in the spring . . . Our experience has been that’s very helpful in driving traffic.
“The interesting thing about Conestoga is Target went away in 2015. So you would think there would be some semblance of a decline in traffic or sales. Well, I can tell you, despite their closure and since 2015, all of the key metrics have continued to grow – the average expenditure, the dwell times, the number of visits, the number of stores visited. The sales have grown by right around 40 per cent since Target’s departure and traffic’s up 13 per cent since their departure and 17 per cent since we opened the redeveloped Target space.”
Drohomirecki said the Target vacancy allowed the mall to add an Indigo store and right-size Sport Chek as well as adding 25 small stores and services to deepen its selection of offerings. The mall has added new washrooms, an additional entrance to an underutilized parking pool and some common areas.
The growth has come as well with the addition of some high profile brand names such as Lululemon, Sephora, Sage, Aritzia and a right-sized H&M.
“And we’re not quite done. Shoppers Drug Mart and Pickle Barrel (restaurant) will open this spring as well. We chip away at the mix. We try to bring in what our consumer is looking for and the Target vacancy has given us an opportunity to deepen the mix a little bit with some high performing tenants,” added Drohomirecki.
He said a mall needs to resonate with its trade area and for Conestoga that includes technology.
“We’re going to be piloting the addition of Bitcoin machines in Conestoga. We’ll be able to allow consumers to buy and sell cryptocurrency which we thought would be pretty cool and would definitely resonate with our folks,” explained Drohomirecki.
“And there’s a myriad of experiential things that we do through the building that ties us back into the community whether that’s with the City of Waterloo or various charities or tenant support – opening up a sports zone to dovetail with Sport Chek’s opening to sort of drive traffic and drive sales their way.”
[Retail Council of Canada 2018 Canadian Shopping Centre Study]
