Suburban shopping centres are struggling to compete with online sales and big-box stores. But these two strategies could give them new life
Although most things can now be bought with the click of a mouse, Ontarians continue to flock every weekend to the province’s top malls. While internet shopping has certainly affected the retail landscape, so-called dead malls don’t litter our cities and suburbs as they do in the United States — our malls are usually backed by pension funds and other risk-averse investment firms, and Canada has always had far less retail space per capita than our neighbours to the south.
So our major shopping centres are doing just fine, despite the loss of major retail chains. (At Square One, in Mississauga, Cineplex’s Rec Room and Uniqlo will take over the vacated Target store; Rec Room, Marshalls, and HomeSense have replaced the Target location at London’s Masonville Place.)
The emphasis here, though, is on “major” and “top.” Not all of the province’s malls have fared so well. Most of the shopping centres built in the 1970s and ’80s in city centres across the province, for example, had failed by the end of the ’90s. The collapse of the Eaton’s department-store chain and competition from larger, suburban malls and new big-box retailers drove customers away from Ontario’s downtowns. Only in Toronto and Ottawa, which boast large downtown office employment, residential development, and good urban transit, have major shopping malls thrived.
And many suburban shopping centres are struggling. Target’s ill-fated entry into the Canadian market in 2013 (it closed all its stores in 2015) and the collapse of Sears Canada left major holes for landlords to fill. Of course, this was not a problem for the largest and most profitable shopping centres. Sears Canada sold several store leases years before it entered bankruptcy. Toronto’s Eaton Centre, Sherway Gardens, and Yorkdale Shopping Centre; Mississauga’s Square One; and Ottawa’s Rideau Centre were quickly able to find new tenants — including Nordstrom, Simons, and Restoration Hardware — to take over the Sears locations.
But smaller malls in less affluent markets were affected by changes in the retail landscape long before Sears and Target closed their doors for good. So-called power centres — big-box retail complexes anchored by retailers such as Home Depot, Costco, and Canadian Tire — started gaining popularity in the early ‘90s. Before Walmart’s entry into the Canadian market in 1994, it bought up former Woolco stores, but it soon abandoned them in favour of custom-built “Supercentres” located in power centres. Small centres such as Etobicoke’s Honeydale Mall and Woodstock’s Blandford Square Mall were the first to lapse into dead-mall status after Walmart pulled up stakes and built new stores nearby.
Larger malls began to show signs of trouble as well by the early 2000s.
The largest of Ontario’s malls to fully close and then be redeveloped is Hamilton’s Centre Mall, which was also the province’s first major shopping centre when it opened, in 1954. Centre Mall, located in Hamilton’s east end, hosted Sears Canada’s first full-line department store. In 1957, Sears was joined by Morgan’s, which later became the Bay. A renovation and expansion in the 1970s included a new K-Mart store, but by the ’90s, east Hamilton had been hit hard by deindustrialization. The old Morgan’s became Zellers; K-Mart closed its Canadian stores in 1998. In 2008, the mall was demolished, and the site was redeveloped as a big-box retail complex. In Mississauga, Meadowvale Town Centre has similarly adapted by mimicking a power centre — closing the mall interior and turning itself inside out.
RioCan Real Estate Investment Trust, the owners of Shoppers World Brampton — a shopping centre that once boasted more than 200 stores and was anchored by Simpson’s (later the Bay) and K-Mart (later Zellers and Target) — are now looking to downsize and redevelop part of the property. Nearly 20 years ago, when RioCan purchased Shoppers World, it spent hundreds of millions of dollars on renovations, including a new food court and new flooring, and succeeded in attracting big-box retailers, such as Canadian Tire and Staples, to the site. But that wasn’t enough to keep the Bay from closing in 2005 (it’s since been demolished and replaced by a Bad Boy furniture outlet) and other chains from departing. Target’s failure in 2015 left a huge space to fill.
Online shopping, local big-box stores — including a new Walmart — and its proximity to Square One, one of Canada’s largest and most successful malls, have all hurt Shoppers World.
Landlords of declining second- and third-tier malls in Ontario, though, have options that many American property owners can only dream of. In many Toronto suburbs, and in cities like London, Kitchener, and Ottawa, shopping centres double as transit hubs. Shoppers World Brampton is adjacent to a major bus terminal that will become the northern terminus of the Hurontario LRT.
London’s Westmount Mall was once anchored by Eaton’s (later Sears), Zellers (later Target), and Dominion. On the ground floor, only the supermarket space remains occupied; the second floor has been converted into medical offices. London’s planning department emphasized the fact that the site’s proximity to transit and schools would make it a good candidate for a walkable mixed-use development — and the centre was recently sold for $31.5 million to KingSett Capital, a Toronto-based real-estate-investment firm.
The high demand for housing gives developers the opportunity to partially or wholly replace mall properties with new condominium or rental apartments. Toronto’s Galleria Mall, a neighbourhood shopping centre at Dufferin and Dupont Streets, will soon be replaced by high-rise apartments, retail, and a community centre. As many regional malls are major retail and transit hubs, the surrounding areas are zoned for high-density housing, making it easier to get redevelopment proposals approved. RioCan, the owner of Brampton’s Shoppers World and many other retail properties, is increasingly focused on residential real estate.
Shopping malls will probably never disappear entirely, but there will likely be fewer of them in the coming years. If Ontario malls, though, continue either to attract upscale retailers and a moneyed clientele — as Rideau Centre, Square One, and Masonville did — or to reinvent themselves by becoming home to offices and residents, they may yet avoid an untimely death.