After 10 years, the world`s largest shopping center is beginning to show its age.
But like so many lemmings, the tourists-Canadian, American and assorted other foreigners-continue to flock to this city of 600,000 located 350 miles north of the Montana border.
So are financial analysts interested in the future face of retailing. For in spite of the huge shakeout taking place in the retail sector, in which vacant strip malls abound, the megamall concept seems on the verge of taking off.
The owners of the West Edmonton Mall are co-developing a similarly sized retail extravaganza set to open next week in Minnesota, and they are eyeing sites in Toronto and Buffalo.
So West Edmonton is worth a second look.
It`s not surprising that a little wear and tear is beginning to show on its glass, brass and marble. Not when more than 23 million people a year, twice as many as visit Disneyland in a year, tramp through the 823 retail stores that cover an area of 115 football fields. The mall and its parking lots cover 110 acres of rolling Alberta farmland.
Without the mall, Edmonton would be a chillier version of Des Moines, surrounded by myriad regional shopping centers and farms.
”West Edmonton Mall has put this city on the map to a great degree,”
said R.T. Hersack, manager of economic research for the Edmonton Economic Development Authority. ”The Ghermezians have done a great job.”
The Ghermezians are the developers of the entertainment/shopping/hotel complex that generates millions of dollars in retail sales. The brothers are also co-developers of the Mall of America, which opens in Bloomington, Minn., Aug. 11. That mall is expected to draw business from all over the Midwest, including Chicago.
”The Chicago malls will keep the people around them. But the tourists, they will go to Mall of America,” said Nader Ghermezian, the point person for the family and its development firm on the Bloomington project, the Triple Five Corp.
He predicts that thousands of tourists who now travel to Woodfield Mall, Oakbrook Center, Fox Valley Shopping Center and Gurnee Mills will soon head for Minnesota and the giant Mall of America.
Ghermezian speaks from experience. His megamall in West Edmonton has enormous drawing power.
An average of 37,000 tourists descend on the place on a typical day. They are drawn by a World Waterpark complete with a bungee jump platform, an Ice Palace for ice skating, a full-size replica of Columbus` ship the Santa Maria (in the world`s largest indoor lake), a triple loop roller coaster and assorted other rides in the Fantasyland amusement park. That`s in addition to the normal mall sideshows of movies, restaurants, hotels and, of course, shopping.
The Ghermezians delight in telling the story that West Edmonton, built at a cost of $913 million, has more submarines on exhibit-four-than the Royal Canadian Navy-three.
But they also delight in the revenue it generates for the family, an estimated $81 million last year, most of it from store rentals. The Fantasyland amusement park chips in $20 million and Fantasyland hotel a little more than $3 million.
”It`s the eighth wonder of the world,” Ghermezian said in a recent interview in his third-floor office overlooking the mall.
There`s no question it`s a wonder. And no question that with all the traffic, it can`t avoid showing its age. But mall general manager Selma Linzer says that`s being addressed by a refurbishing.
What can`t be addressed, however, is the exterior esthetics, which seem to have been forgotten when the mall was built. Approaching the mall, all a motorist sees are the triple-level parking decks that surround the center with 20,000 parking spaces.
Still they come-tourists and Edmonton residents-spending a mind-boggling $380 per square foot annually. The average U.S. department store generates about half as much.
Forty percent of the tourists come from other parts of Alberta province, of which Edmonton is the capital; 17 percent come from British Columbia; 21 percent from other parts of western Canada; 12 percent from central and eastern Canada; and 11 percent from other countries.
A large percentage of the foreign tourists to West Edmonton are Japanese, which is expected to be the case at the Bloomington mall.
But Ghermezian said he`d be happier with German or English tourists.
”The Japanese don`t spend money,” he said matter of factly. If Ghermezian`s impressions about the spending habits of Japanese tourists are accurate, the impact on the Mall of America, which plans to appeal directly to Japanese tourists, could be significant.
Ghermezian predicts Mall of America, built on the site of the former home of the Minnesota Twins baseball team and Minnesota Vikings football team, will have a greater impact on the Twin Cities area than West Edmonton Mall had on Alberta province.
That impact has been staggering, according to the city`s economic development authority:
– Each year tourists visiting the mall spend an estimated $2 billion in the Edmonton region.
– For every dollar spent at the mall, another $2 is spent in the metropolitan area.
– 18,000 people are employed at the mall, fully 10 percent of the Edmonton work force.
– The mall directly generates $180 million for the provincial and national economies. Another $250 million is generated indirectly by the mall. – Because of the huge number of tourist shoppers, Alberta province for years has been the highest-rated Canadian province in terms of retail per-capita spending-$611 earlier this year.
– Despite the recession, which has affected Canada as much as the U.S., retail spending increased 9 percent at the mall, compared to a 1 percent decline Canada-wide.
Those statistics, according to the economic development authority, are based upon 23 million shoppers annually visiting the West Edmonton Mall. And Ghermezian notes pointedly that they project Bloomington`s mall will attract double that number.
Ghermezian predicts the megamall is the wave of the future.
”The trend is toward the kinds of projects that no one can compete with,” he said, noting he`s negotiating with Toronto and Buffalo officials to build megamalls there. He also said he`s in contact with a number of other U.S. cities, but declined to be specific.
No other megamalls have been built in the past 10 years because there is no blueprint for megamalls, Ghermezian said.
And the Bloomington mall wouldn`t be on the verge of opening without the Ghermezians, according to Selma Linzer, vice president of shopping center operations for Triple Five and general manager of the West Edmonton Mall.
”They know how to do it,” she said.
