The main purpose of an anchor store in a shopping mall is to attract customers and drive foot traffic to the mall, benefiting smaller retailers within the complex. An anchor store is typically a large, well-known retail store that serves as the primary draw for shoppers.
These stores are often strategically located within the mall, such as at either end of the property. They are often department stores like Macy's or Nordstrom, or big-box retailers such as Walmart or Target. Their strong brand recognition, wide range of desirable merchandise, and significant advertising budgets help entice consumers to visit the shopping center.
The presence of anchor stores is crucial for the success of a mall and its smaller retailers. When an anchor store attracts a high volume of shoppers, those customers are more likely to explore and make purchases at the surrounding smaller stores as well. Essentially, the anchor store acts as a magnet, pulling in consumers and increasing foot traffic and sales throughout the mall.
Smaller retailers often pay a premium for mall space near anchor stores to capitalize on this phenomenon. Some even negotiate specific lease clauses to protect their interests if an anchor store closes or mall traffic declines below a certain level, underscoring the vital role these major retailers play in a shopping center's overall health and viability.
Key Characteristics of Anchor Stores
Some of the key characteristics of anchor stores in shopping malls include:
- Size - Anchor stores are large retail spaces, usually department stores or big box stores spanning 50,000 square feet or more. Their massive footprint helps them drive customer traffic.
- Brand Recognition - Anchor stores are major retail brands with widespread name recognition, such as Macy's, Nordstrom, Sears, etc. Their familiar branding draws customers into the mall.
- Product Range - Anchor stores offer extensive merchandise across many categories like apparel, footwear, home goods, electronics, etc. This variety entices shoppers to visit and browse.
- Location - Anchor stores occupy prominent locations at entrances or intersections within the mall layout. Strategic placement ensures high visibility and access to generate mall traffic.
- Customer Service - Anchor stores provide helpful, high-quality customer service, enhancing the shopping experience. Memorable service keeps customers coming back.
- Advertising—Anchor stores have large marketing budgets for advertising. This brand awareness and promotion bring attention to the mall itself.
Examples of Anchor Stores
Here are some key examples of anchor stores commonly found in shopping malls:
Nordstrom
Nordstrom is a prominent anchor store known for offering high-end clothing, accessories, beauty products, and exceptional customer service. Founded in Seattle in 1901, Nordstrom evolved into a large department store format in the 1960s and has since become a major anchor tenant in many malls across the United States.
The Bay
The Bay, formerly known as the Hudson's Bay Company, is a Canadian retail giant and one of North America's oldest retailers. Established in 1670, The Bay offers extensive merchandise, including clothing, beauty products, home furnishings, and electronics. As a long-standing anchor store, The Bay attracts customers to shopping centers throughout Canada.
Macy's
Macy's, a well-known American department store chain offering a wide range of products such as clothing, accessories, and home goods; JCPenney, which provides a variety of clothing, home decor, and appliances; and Saks Fifth Avenue, an upscale retailer owned by The Bay that specializes in designer apparel, accessories, and luxury goods.
Anchor Store Vs. Vanilla Store
The main differences between anchor stores and vanilla stores in a retail mall setting are:
Size and prominence:
- Anchor stores are large, well-known retail stores that serve as the primary draw for customers to a shopping mall.
- Anchor stores in the U.S. include major department stores like Macy's, Nordstrom, JCPenney, and big-box retailers such as Walmart and Target.
- Vanilla stores, also known as inline stores, are relatively smaller retail establishments within a mall that offer a diverse range of products and services.
- Vanilla stores encompass the diverse mix of smaller retail shops that populate a mall alongside the anchors.
Brand recognition and drawing power:
- Anchor stores have strong brand recognition and can attract large crowds of shoppers to the mall. Consumers often drive miles specifically to shop at anchor stores.
- Vanilla stores do not have the same brand recognition or drawing power as anchor stores. They rely more on the foot traffic generated by the anchor stores.
Role in the mall ecosystem:
- Anchor stores are critical to a mall's success. They bring in the majority of consumer traffic, which then disperses to the smaller retailers nearby.
- Vanilla stores contribute to the overall variety, mix of offerings, and shopping experience within a mall. Their positioning allows shoppers to explore a range of options.
What are the effects of an anchor store in a shopping center?
An anchor store, typically a large, well-known retail chain, is the primary draw for customers to a shopping mall or center.
The effect of opening an Anchor Store
When an anchor store opens in a mall, it can have a significant positive impact on the entire shopping complex. The anchor attracts a high volume of shoppers with its broad appeal, extensive advertising, and desirable merchandise.
This increased foot traffic benefits all the other smaller retailers in the mall, as customers drawn to the anchor often visit and make purchases at surrounding stores as well.
Smaller shops located in close proximity to the anchor especially profit from the boost in passersby and potential customers.
The effect of closing an Anchor store
However, when an anchor store closes or leaves a mall, it can have severe negative consequences. The loss of the anchor's pull can dramatically decrease overall shopper traffic to the mall.
Fewer visitors means reduced sales for remaining tenants. Vacant anchor spaces are a glaring signal that a mall is struggling, which may deter other businesses from opening there and motivate existing ones to relocate.
A shopping center heavily depends on its anchors to remain profitable and appealing.
Summary of anchor stores on shopping centers:
- Anchor store openings bring in more customers, increasing foot traffic and sales for all mall tenants, especially those located nearest the anchor
- Anchor store closures lead to significantly fewer mall visitors, hurting remaining retailers' sales
- Empty anchor spaces project an image of a failing mall and may spur more store closures
- Loss of anchor stores can decrease a mall's property value by 50%+
- Malls rely on anchor tenants to stay successful and attract businesses
