February 19, 2009
Malls Cutting Hours as Traffic Slows
Simon Property
Group and the Westfield Group have separately announced plans to cut back
hours at malls they operate in response to lighter foot traffic and the
need to reduce costs, according to Retail Traffic.
Last month,
Simon announced it would close malls in New England between 30-minutes
and a an hour earlier Monday through Saturday. At the
time, Laurel Sibert, vice president of mall marketing for Simon in the
region, said, "Our ongoing review processes have determined that mall hours
in New England could and should be modified to maximize efficiencies for
the shopping centers and our retailers, who – like Simon – are focused
on energy conservation."
Beginning
March 1, Westfield will cut hours of operation at 48 of its 55 malls by
five hours a week. The company is looking to open malls 30-minutes
later and close them 30-minutes earlier during the week. It plans to leave
weekend hours as-is.
"We’re trying
to help our tenants find ways to conserve and respond to changed traffic
patterns," Catherine Dickey, a Westfield spokesperson, told the St.
Petersburg Times.
Discussion Questions:
Is it a smart move for mall operators to cut hours of operation or will
this wind up hurting retail tenants? Have you seen merchants in standalone
locations also cutting back hours of operation?
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Garden State Plaza is closed Sundays because Bergen County is one of the few places that still enforce blue laws. Most retailing is illegal in Bergen County on Sunday. You can’t even stay closed to count inventory on Sunday.
As for cutting mall hours, the energy bills are passed onto tenants regardless, as common area charges (CAM), so the developers save almost nothing. Cutting an hour a day, 5 days a week isn’t significant. Better: cut out Tuesday and Wednesday completely, or open the mall from noon to 8, Monday through Friday. Closing 2 days a week reduces store operations stress tremendously.
As for the convenience comparison to online shopping: the customer still suffers the delivery lag time versus immediate gratification at the mall.
The real mall problem: the tenants are generally high-margin high-cost operators with high prices. Malls don’t scream value: they scream the opposite.
I’m not sure I would be too happy with my landlord if they cut mall hours. I want to be open for my customers. I have to compete with 24 hour Walmarts and Targets. Convenience is still a big part of the customer experience.
I remember when the local department stores were open only a couple nights a week and closed on Sunday. It worked for them and made good sense and customers accepted it because there were no alternatives.
However, the retail environment has changed significantly. First there is considerable channel blurring. Customers can buy many (if not all) the things that they get at the mall somewhere else. True, they many not be able to get the same brands, but in today’s economy, people are seeking to downsize their spending. Second the mall stores competitors are open longer hours and customer have gotten use to being able to buy what they want to buy when they want to buy it.
All that being said, I understand the rationale behind slimming down the hours. Hopefully, for the stores in the mall, what they save more than offsets the lost sales.
Adjusting mall operating hours is a good thing. But I do hope this doesn’t step on so many of the mall walker’s clubs who use the mall during the very early hours. Some do stay to shop, so on the opening end anyway, malls should rethink about opening later.
About closing earlier; that’s another matter. I think malls should close earlier on Saturday nights. If anchors want to stay open later and movie theaters and adjacent restaurants want to operate later, why sure, stay open. But the vast majority of malls are occupied by shoppers on late Saturday nights who are just looking for a place to hang out, congregate, even cause trouble and committing crimes. These types of crowds mall owners can definitely do without.
Like the commenter mentioned about Australia, I really, really liked that most stores closed early Saturday afternoon, around 3 pm and stayed closed on Sunday. I found that I enjoyed shopping during that early afternoon on Saturday, because it felt special. And those awnings that connect a zillion store fronts in Melbourne, Sydney and Adelaide, create really funky shopping districts that seem way more welcoming that our big box lands and zillion acres of asphalt parking lots.
Cutting hours makes good business sense. Not all retailers will benefit and hopefully they have included a clause in their lease that lets them walk away if hours are cut so they can relocate to an area that allows longer hours. I’ve seen my local grocery chain go from 24 hours to 6 am to midnight then reduced again to 10 or 11 pm. Even Walmart has cut hours on many supercenters with some closing at 10 pm, mostly for security purposes. Regardless, store hours are based on demand, and with lower demand, hours should be cut.
As a small business owner, I want longer hours in the evenings and couldn’t care less about stores open before before 2 P.M.
But I agree that the big box stores learned that longer hours are better for customers and business and Meijer and other superstores being open 24 hours has taken many other stores’ customers away permanently. The other feature mall owners are forgetting is that the restaurants, Food Courts & Food Kiosk Vendors only make food sales when there are clients strolling the mall which, in suburban and small-town America, is the only local diversion! They need to stay open longer or even 24 hours, offer entertainment and more community group events like local schools and religious or community groups, choral, dance, actors and non-profit fund-raiser groups to get customers out of their homes and off TVs/Cable/DVDs/CDs and into the mall!
Today’s malls are, for the most part, cookie-cutter conformist and boring places! Bring back entertaining and exciting events!
I had to smile at Charlie Moro’s comments about Australia and a different approach to life.
My first service experiences there (which involved moving a family of four with a wife seven months pregnant) left me telling people back in the States that I had discovered the true meaning of Australia. Their favorite phrase is “No worries, mate. She’ll be right.” And that translates to “It is all [messed] up–and I’m not going to do a [darn] thing about it!”
Three years later I left Oz telling people yet again that I “had discovered the true meaning of Australia”–No Australian ever died of a stress-induced heart attack.
There’s a lot we don’t want to follow Aussie’s lead on to be sure, but there is a lot to be said for their attitude toward enjoying life!
An old retail adage that I grew up with is to “shoot when the ducks are flying.” No ducks; save your bullets for more productive times.
Cutting unproductive hours for retailers is a no-brainer. Your POS system can help identify these unproductive times. Retailers and mall operators alike need to identify inefficiencies in there operation to control expenses. PS: That’s why you have the internet.
I think that the kind of cutbacks in hours that are being talked about here are not likely to have a significant impact on shoppers or business. If we’re talking about a half hour in the morning and a half hour at night, particularly on weekdays, I think the consumer will be able to adapt without much difficulty.
Hours, however, are the least of the problems for malls. They can cut expenses on the margin, but that doesn’t address the fact that they are becoming less relevant to many of their core shoppers. While they still generate a lot of traffic, their market share is eroding as other destinations become more focused and more convenient.
It’s hard to envision how anchor department stores escape the “your father’s Oldsmobile” fate, while far too many mall specialty stores seem incapable of creating fresh, unique and compelling shopping experiences to break out of the “me too” price-promotion, mark-it-down rut.
Cutting hours may be necessary short-term if you have to do it to survive, but I think we all agree it will only hasten the decline of the format. In reality, mall operators should be asking a different question: what will it take to revive the enclosed mall concept? As the marginal price of space within malls gets lower, someone ought to be out there trying lots of possible concepts to find one that pops. I have no idea what the answer is, but I think it must be some form of community building or entertainment. I think I can tell you what the answer is NOT: simply adding new and different stores.
In an environment of convenience and service, I think mall operators that cut back on shopping hours will only hurt the smaller tenants inside the mall as I’m guessing the larger anchor stores will continue to use their outside entries and exits to accommodate the shopper’s desire to have flexibility in terms of shopping times and hours.
I could easily see where malls might want to open later in the morning (or at noon) five or six days a week to save on operating costs but I would also expect they would need to have full or even extended operating hours on Friday and Saturday.
If I look at operators like Kohl’s, they seem to get it as they are often open early and stay open late (11 pm)…the malls that cut back on hours will most probably cause online shopping to grow a little faster!
I remember a major conversation many years ago about keeping one of our new stores in an inner city location open 24 hours like a number of other stores. After much discussion about loss of sales our owner walked in and shared some of his 80 years worth of insight and said “it’s all how you train your pups.” Ukrop’s does quite well being closed on Sundays. Malls in Australia have no concept of being open as often and late as we are. My favorite part of service in Australia is there is no mail service on Saturday. The thought is, “you already get mail Monday to Friday, do you really need mail on Saturday?”
Malls closing early is a good social as well as business benefit. Do we need to be shopping at 11 pm? Can we plan meals a little better where we don’t go to stores on Sunday and instead go for a walk and deal with youth obesity?
There are lots of benefits to changing our habits…it may be the silver lining in the economic meltdown.
I’m sure mall developers have studied the economics of this move, and they probably find that the first and last 30 to 60 minutes the doors are open are relatively unproductive in terms of foot traffic vs. the costs of payroll, utilities, and so on. However, there are a couple of strategic costs associated with these moves:
1. How important is that first and last half-hour to the maintenance, restocking and recovery of store shelves? Will some retailers maintain a staff outside of “open hours” to help execute properly?
2. Will the reduction in hours contribute to the long-term decline of the mall? Big-box retailers (think Target and Kohl’s, for example) figured out some time ago that the convenience of longer hours provides a distinct competitive advantage.
These decisions may make short-term economic sense but help contribute to the long-term irrelevance of the regional mall.
Trimming operating hours cuts both ways for mall tenants. They lose opportunities to sell–hopefully the least productive hours of the week, but still a minus. They also trim operating costs by paying for fewer staff hours.
I’d bet the mall operators did not propose to trim base rental rates in proportion to the hours cut back. But if I remember correctly, many mall tenants also pay a percentage of gross sales to the landlord. In this regard mall operators and store operators are partners and should naturally seek to optimize the balance between operating costs and opportunity costs.
Changing store hours must be done with consumers in mind. Informing them of the changes is very important so that a customer doesn’t show up at 9 am only to have to wait until 9:30 am or 10 am to get in the store. That leads to disappointment and pushes them toward online shopping alternatives or other stores. Clear signs, posting new store hours on websites, and even information on store receipts can be helpful.
And how will consumers be informed that the store is now closing at 8:30 pm, for example, rather than 9 pm? Will these changes be announced in the store and how will associates be trained so as not to anger customers?
A half hour either way probably won’t make that much difference to consumers if the change is communicated clearly.
This is one of those decisions that are being made by accountants and other bean counters. It is certainly not a decision being made by any merchants who actually care about their customers. It is very likely some of the anchor tenants in these malls will stay open their regular hours–the hours their customers have come to expect their stores to be open.
I wonder if any of the commentators above ever worked in a store in a mall in January on a Monday/Tuesday/Wednesday morning? Even during boom years, those first two hours are so dead, it’s a complete waste of labor dollars to say nothing of an extra load on managers, who usually have to be there.
It’s just plain smart to re-think the whole thing. As many point out above, sometimes it’s better to stay open later, sometimes not. Instead of just standardizing hours across all properties, the idea of customizing mall hours to the area/time of year economy/traffic flow is good business and long overdue.
In reading most of the comments, I see that the majority of the respondents appear to be individuals that “tell” rather than “do.” Having worked in a variety of retail store environments, I can tell you that many retailers have lost sight of the fact that they serve TWO customers. The shopper AND the employee that is generally ignored in terms of quality of life and process improvement.
I enjoyed reading the comments about Australia and quality of life which is something most American retailers have ignored in terms of those that are interacting with the customers one on one. Treat the employee like they are a disposable resource, ignore the importance of their quality of life and you will find as is the case in many stores and companies that they frankly don’t care about the customer that is important to the success of retailers.
Yes, decisions in terms of customer convenience are important and shouldn’t be made lightly, but perhaps the American philosophy of “I have to have it now” is a contributor to the current economic state of America and the fiscal weakness of many retailers. You can enhance customer satisfaction in many ways and grousing about malls cutting back hours isn’t going to solve what frankly is suspect decision making on the part of retail executives.
Cutting hours to meet lower traffic levels makes good sense, but mall owners need to be flexible. Peak shopping seasons; BTS, and Holiday will require longer hours to meet demand. During the rest of the year shorter hours could help already stressed payroll hours. With fewer hours to fill, staffing to traffic could actually become a reality that would help improve service and increase conversion during higher traffic periods. Will customers rebel? I don’t think so. I agree with Charlie, it’s all how you train your pups.
This strategy is long overdue. If the consumer is given 12 hours seven days a week, they will wait. My hope is that malls will review and universally go to 10-8 M-F, Saturday 10-7 closed on Sunday.
The industry needs to review Garden State Plaza, one of the top-performing malls in the US. The Garden State Plaza Mall is completely closed on Sundays, except for some of the restaurants and the new theater (they have special Sunday entrances.) This approach would be considered Green, it would save millions in labor costs and would retain customers’ shopping patterns. Lastly, one that has worked retail hours would appreciate the work/balance approach.
I have always thought that mall hours are one reason they can’t compete with open air stores that stay open until 10 or later. I think that malls should open and close an hour later than they do if they want to pick up traffic. Closing earlier? That’s just going to drive more people away.
Cutting hours for the mall owner is a good thing. It reduces labor hours and utility costs. For the tenant, it becomes an iffy proposition. Will the reduced hours allow them to save enough on payroll–which is the only cost they will be able to cut? Will sales be reduced even further because of the shorter hours? Will people change their shopping habits and buy the same amount of goods in the shorter time span? Or will they say “the mall now closes at 8:30 instead of 9 and it is 8:00 so I won’t go” and soon enough, there will be less business at 8:30, so why not move the hours back to 8:00?
I wonder if the mall owners are going to cut their rents because they are are providing fewer services to their customers–the tenants.
Internet shopping will continue to be available 24/7 to meet the demands of customers who need to shop during nontraditional hours. Malls need to consider their virtual competitors as well and not think “out of sight, out of mind.”
Amazon.com is doing quite well these days! Why? Because of the above!
I’m a bit ‘mixed’ on this one. From a pure service perspective cutting hours would seem to fly in the face of convenience to the customer. However, in most malls, you can shoot a cannon through the hallways at opening (you might hit the occasional mall walker though) and in the last 30 minutes of each day. So, if there are not many customers there to serve, would you really be doing a disservice?
The payroll cost savings annually would be very significant for most chains (even a small specialty retailer would save over $10,000 in payroll annually…adds up if you have 100 stores).
So, unless you can prove to me that the dollars pulled in during those hours are in any way significant or not recoverable, I’d vote for closing them down for a few hours each week.
Personally, I think whether this is a good or bad decision depends on a number of conditions, especially what the current hours are. A mall going from 10 AM to 9:30 PM is going to have very little impact on the customers or on sales, but sure will make the employees a lot happier.
I will be very interested to see if the outlet malls open at midnight on Thanksgiving again this year. Very ridiculous. The poor sales help could not even enjoy a full holiday. I would dare to say that what the companies had to put out for almost 24 hours of pay that day and deep discounts cost them so much in the long run.
Few seem to understand the difference between sales and actual profit margin. With all the store closings this year, I bet they do now!
IKEA, a major retail operator in many countries, keeps reasonable opening times that allow it to operate efficiently and serve its customers. Opening from 7am to midnight means that you spread your customer service thinner and will disappoint as many customers as you satisfied with longer opening times.
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Garden State Plaza is closed Sundays because Bergen County is one of the few places that still enforce blue laws. Most retailing is illegal in Bergen County on Sunday. You can’t even stay closed to count inventory on Sunday.
As for cutting mall hours, the energy bills are passed onto tenants regardless, as common area charges (CAM), so the developers save almost nothing. Cutting an hour a day, 5 days a week isn’t significant. Better: cut out Tuesday and Wednesday completely, or open the mall from noon to 8, Monday through Friday. Closing 2 days a week reduces store operations stress tremendously.
As for the convenience comparison to online shopping: the customer still suffers the delivery lag time versus immediate gratification at the mall.
The real mall problem: the tenants are generally high-margin high-cost operators with high prices. Malls don’t scream value: they scream the opposite.
I’m not sure I would be too happy with my landlord if they cut mall hours. I want to be open for my customers. I have to compete with 24 hour Walmarts and Targets. Convenience is still a big part of the customer experience.
I remember when the local department stores were open only a couple nights a week and closed on Sunday. It worked for them and made good sense and customers accepted it because there were no alternatives.
However, the retail environment has changed significantly. First there is considerable channel blurring. Customers can buy many (if not all) the things that they get at the mall somewhere else. True, they many not be able to get the same brands, but in today’s economy, people are seeking to downsize their spending. Second the mall stores competitors are open longer hours and customer have gotten use to being able to buy what they want to buy when they want to buy it.
All that being said, I understand the rationale behind slimming down the hours. Hopefully, for the stores in the mall, what they save more than offsets the lost sales.
Adjusting mall operating hours is a good thing. But I do hope this doesn’t step on so many of the mall walker’s clubs who use the mall during the very early hours. Some do stay to shop, so on the opening end anyway, malls should rethink about opening later.
About closing earlier; that’s another matter. I think malls should close earlier on Saturday nights. If anchors want to stay open later and movie theaters and adjacent restaurants want to operate later, why sure, stay open. But the vast majority of malls are occupied by shoppers on late Saturday nights who are just looking for a place to hang out, congregate, even cause trouble and committing crimes. These types of crowds mall owners can definitely do without.
Like the commenter mentioned about Australia, I really, really liked that most stores closed early Saturday afternoon, around 3 pm and stayed closed on Sunday. I found that I enjoyed shopping during that early afternoon on Saturday, because it felt special. And those awnings that connect a zillion store fronts in Melbourne, Sydney and Adelaide, create really funky shopping districts that seem way more welcoming that our big box lands and zillion acres of asphalt parking lots.
Cutting hours makes good business sense. Not all retailers will benefit and hopefully they have included a clause in their lease that lets them walk away if hours are cut so they can relocate to an area that allows longer hours. I’ve seen my local grocery chain go from 24 hours to 6 am to midnight then reduced again to 10 or 11 pm. Even Walmart has cut hours on many supercenters with some closing at 10 pm, mostly for security purposes. Regardless, store hours are based on demand, and with lower demand, hours should be cut.
As a small business owner, I want longer hours in the evenings and couldn’t care less about stores open before before 2 P.M.
But I agree that the big box stores learned that longer hours are better for customers and business and Meijer and other superstores being open 24 hours has taken many other stores’ customers away permanently. The other feature mall owners are forgetting is that the restaurants, Food Courts & Food Kiosk Vendors only make food sales when there are clients strolling the mall which, in suburban and small-town America, is the only local diversion! They need to stay open longer or even 24 hours, offer entertainment and more community group events like local schools and religious or community groups, choral, dance, actors and non-profit fund-raiser groups to get customers out of their homes and off TVs/Cable/DVDs/CDs and into the mall!
Today’s malls are, for the most part, cookie-cutter conformist and boring places! Bring back entertaining and exciting events!
I had to smile at Charlie Moro’s comments about Australia and a different approach to life.
My first service experiences there (which involved moving a family of four with a wife seven months pregnant) left me telling people back in the States that I had discovered the true meaning of Australia. Their favorite phrase is “No worries, mate. She’ll be right.” And that translates to “It is all [messed] up–and I’m not going to do a [darn] thing about it!”
Three years later I left Oz telling people yet again that I “had discovered the true meaning of Australia”–No Australian ever died of a stress-induced heart attack.
There’s a lot we don’t want to follow Aussie’s lead on to be sure, but there is a lot to be said for their attitude toward enjoying life!
An old retail adage that I grew up with is to “shoot when the ducks are flying.” No ducks; save your bullets for more productive times.
Cutting unproductive hours for retailers is a no-brainer. Your POS system can help identify these unproductive times. Retailers and mall operators alike need to identify inefficiencies in there operation to control expenses. PS: That’s why you have the internet.
I think that the kind of cutbacks in hours that are being talked about here are not likely to have a significant impact on shoppers or business. If we’re talking about a half hour in the morning and a half hour at night, particularly on weekdays, I think the consumer will be able to adapt without much difficulty.
Hours, however, are the least of the problems for malls. They can cut expenses on the margin, but that doesn’t address the fact that they are becoming less relevant to many of their core shoppers. While they still generate a lot of traffic, their market share is eroding as other destinations become more focused and more convenient.
It’s hard to envision how anchor department stores escape the “your father’s Oldsmobile” fate, while far too many mall specialty stores seem incapable of creating fresh, unique and compelling shopping experiences to break out of the “me too” price-promotion, mark-it-down rut.
Cutting hours may be necessary short-term if you have to do it to survive, but I think we all agree it will only hasten the decline of the format. In reality, mall operators should be asking a different question: what will it take to revive the enclosed mall concept? As the marginal price of space within malls gets lower, someone ought to be out there trying lots of possible concepts to find one that pops. I have no idea what the answer is, but I think it must be some form of community building or entertainment. I think I can tell you what the answer is NOT: simply adding new and different stores.
In an environment of convenience and service, I think mall operators that cut back on shopping hours will only hurt the smaller tenants inside the mall as I’m guessing the larger anchor stores will continue to use their outside entries and exits to accommodate the shopper’s desire to have flexibility in terms of shopping times and hours.
I could easily see where malls might want to open later in the morning (or at noon) five or six days a week to save on operating costs but I would also expect they would need to have full or even extended operating hours on Friday and Saturday.
If I look at operators like Kohl’s, they seem to get it as they are often open early and stay open late (11 pm)…the malls that cut back on hours will most probably cause online shopping to grow a little faster!
I remember a major conversation many years ago about keeping one of our new stores in an inner city location open 24 hours like a number of other stores. After much discussion about loss of sales our owner walked in and shared some of his 80 years worth of insight and said “it’s all how you train your pups.” Ukrop’s does quite well being closed on Sundays. Malls in Australia have no concept of being open as often and late as we are. My favorite part of service in Australia is there is no mail service on Saturday. The thought is, “you already get mail Monday to Friday, do you really need mail on Saturday?”
Malls closing early is a good social as well as business benefit. Do we need to be shopping at 11 pm? Can we plan meals a little better where we don’t go to stores on Sunday and instead go for a walk and deal with youth obesity?
There are lots of benefits to changing our habits…it may be the silver lining in the economic meltdown.
I’m sure mall developers have studied the economics of this move, and they probably find that the first and last 30 to 60 minutes the doors are open are relatively unproductive in terms of foot traffic vs. the costs of payroll, utilities, and so on. However, there are a couple of strategic costs associated with these moves:
1. How important is that first and last half-hour to the maintenance, restocking and recovery of store shelves? Will some retailers maintain a staff outside of “open hours” to help execute properly?
2. Will the reduction in hours contribute to the long-term decline of the mall? Big-box retailers (think Target and Kohl’s, for example) figured out some time ago that the convenience of longer hours provides a distinct competitive advantage.
These decisions may make short-term economic sense but help contribute to the long-term irrelevance of the regional mall.
Trimming operating hours cuts both ways for mall tenants. They lose opportunities to sell–hopefully the least productive hours of the week, but still a minus. They also trim operating costs by paying for fewer staff hours.
I’d bet the mall operators did not propose to trim base rental rates in proportion to the hours cut back. But if I remember correctly, many mall tenants also pay a percentage of gross sales to the landlord. In this regard mall operators and store operators are partners and should naturally seek to optimize the balance between operating costs and opportunity costs.
Changing store hours must be done with consumers in mind. Informing them of the changes is very important so that a customer doesn’t show up at 9 am only to have to wait until 9:30 am or 10 am to get in the store. That leads to disappointment and pushes them toward online shopping alternatives or other stores. Clear signs, posting new store hours on websites, and even information on store receipts can be helpful.
And how will consumers be informed that the store is now closing at 8:30 pm, for example, rather than 9 pm? Will these changes be announced in the store and how will associates be trained so as not to anger customers?
A half hour either way probably won’t make that much difference to consumers if the change is communicated clearly.
This is one of those decisions that are being made by accountants and other bean counters. It is certainly not a decision being made by any merchants who actually care about their customers. It is very likely some of the anchor tenants in these malls will stay open their regular hours–the hours their customers have come to expect their stores to be open.
I wonder if any of the commentators above ever worked in a store in a mall in January on a Monday/Tuesday/Wednesday morning? Even during boom years, those first two hours are so dead, it’s a complete waste of labor dollars to say nothing of an extra load on managers, who usually have to be there.
It’s just plain smart to re-think the whole thing. As many point out above, sometimes it’s better to stay open later, sometimes not. Instead of just standardizing hours across all properties, the idea of customizing mall hours to the area/time of year economy/traffic flow is good business and long overdue.
In reading most of the comments, I see that the majority of the respondents appear to be individuals that “tell” rather than “do.” Having worked in a variety of retail store environments, I can tell you that many retailers have lost sight of the fact that they serve TWO customers. The shopper AND the employee that is generally ignored in terms of quality of life and process improvement.
I enjoyed reading the comments about Australia and quality of life which is something most American retailers have ignored in terms of those that are interacting with the customers one on one. Treat the employee like they are a disposable resource, ignore the importance of their quality of life and you will find as is the case in many stores and companies that they frankly don’t care about the customer that is important to the success of retailers.
Yes, decisions in terms of customer convenience are important and shouldn’t be made lightly, but perhaps the American philosophy of “I have to have it now” is a contributor to the current economic state of America and the fiscal weakness of many retailers. You can enhance customer satisfaction in many ways and grousing about malls cutting back hours isn’t going to solve what frankly is suspect decision making on the part of retail executives.
Cutting hours to meet lower traffic levels makes good sense, but mall owners need to be flexible. Peak shopping seasons; BTS, and Holiday will require longer hours to meet demand. During the rest of the year shorter hours could help already stressed payroll hours. With fewer hours to fill, staffing to traffic could actually become a reality that would help improve service and increase conversion during higher traffic periods. Will customers rebel? I don’t think so. I agree with Charlie, it’s all how you train your pups.
This strategy is long overdue. If the consumer is given 12 hours seven days a week, they will wait. My hope is that malls will review and universally go to 10-8 M-F, Saturday 10-7 closed on Sunday.
The industry needs to review Garden State Plaza, one of the top-performing malls in the US. The Garden State Plaza Mall is completely closed on Sundays, except for some of the restaurants and the new theater (they have special Sunday entrances.) This approach would be considered Green, it would save millions in labor costs and would retain customers’ shopping patterns. Lastly, one that has worked retail hours would appreciate the work/balance approach.
I have always thought that mall hours are one reason they can’t compete with open air stores that stay open until 10 or later. I think that malls should open and close an hour later than they do if they want to pick up traffic. Closing earlier? That’s just going to drive more people away.
Cutting hours for the mall owner is a good thing. It reduces labor hours and utility costs. For the tenant, it becomes an iffy proposition. Will the reduced hours allow them to save enough on payroll–which is the only cost they will be able to cut? Will sales be reduced even further because of the shorter hours? Will people change their shopping habits and buy the same amount of goods in the shorter time span? Or will they say “the mall now closes at 8:30 instead of 9 and it is 8:00 so I won’t go” and soon enough, there will be less business at 8:30, so why not move the hours back to 8:00?
I wonder if the mall owners are going to cut their rents because they are are providing fewer services to their customers–the tenants.
Internet shopping will continue to be available 24/7 to meet the demands of customers who need to shop during nontraditional hours. Malls need to consider their virtual competitors as well and not think “out of sight, out of mind.”
Amazon.com is doing quite well these days! Why? Because of the above!
I’m a bit ‘mixed’ on this one. From a pure service perspective cutting hours would seem to fly in the face of convenience to the customer. However, in most malls, you can shoot a cannon through the hallways at opening (you might hit the occasional mall walker though) and in the last 30 minutes of each day. So, if there are not many customers there to serve, would you really be doing a disservice?
The payroll cost savings annually would be very significant for most chains (even a small specialty retailer would save over $10,000 in payroll annually…adds up if you have 100 stores).
So, unless you can prove to me that the dollars pulled in during those hours are in any way significant or not recoverable, I’d vote for closing them down for a few hours each week.
Personally, I think whether this is a good or bad decision depends on a number of conditions, especially what the current hours are. A mall going from 10 AM to 9:30 PM is going to have very little impact on the customers or on sales, but sure will make the employees a lot happier.
I will be very interested to see if the outlet malls open at midnight on Thanksgiving again this year. Very ridiculous. The poor sales help could not even enjoy a full holiday. I would dare to say that what the companies had to put out for almost 24 hours of pay that day and deep discounts cost them so much in the long run.
Few seem to understand the difference between sales and actual profit margin. With all the store closings this year, I bet they do now!
IKEA, a major retail operator in many countries, keeps reasonable opening times that allow it to operate efficiently and serve its customers. Opening from 7am to midnight means that you spread your customer service thinner and will disappoint as many customers as you satisfied with longer opening times.