The Barbell Effect That's Buffing Up Retailers

shopper, retail

New research from CBRE shows discount retailers and high-end shopping centers continue to strengthen their balance sheets as both financially strained, and financially savvy, customers alter their shopping habits.

It is a classic Barbell Effect. The Barbell Effect occurs when technological innovations, shifting demographics and changing shopping patterns disrupt ingrained business practices of a specific industry. Those companies that fail to adapt end up contracting into the center of the barbell. Companies that are able to pivot successfully in this new landscape move toward the ends, where there is ample room to expand.

Close to 6,000 discount stores opened throughout the U.S. from 2010 to 2015, with sales increasing from $30.4B to $45.3B, according to research firm Conlumino. This 50% growth rate easily outpaced the 17% in overall retail sales during the same period.

At the other end of the barbell, top-tier shopping centers are continually expanding their tenant mix, locking in major players. In Houston, Simon has recently expanded the Houston Galleria with a two-story, 198K SF Saks Fifth Avenue flagship store opened in 2016. Additions include 35 luxury retailers. In Fort Worth, Simon and Cassco Development are close to opening Phase 1 of the Shops at Clearfork, boasting 380K SF of luxury and specialty retail.

Malls are not going extinct, but they are changing. Retailers who are able and willing to adapt quickly will gain greater market share and be able to keep their doors open indefinitely, CBRE reports.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Houston Newsletters
Related Stories

3 Houston Office Properties, Vacant To Nearly Full, Change Hands

How U.S. Giant Realty Income Bought The UK And Europe

Spirit Christmas Unveils Plans To Grow Store Count This Holiday Season

How Houston's Next Generation Of Retail Can Elevate The Suburbs And Attract Customers

Deutsche Bank Files $260M Foreclosure Suit For Broward County Mall

Success Of Top-Tier Malls Masks Enduring Distress In Sector's Underbelly

Holographic Zoo Leases 51K SF Coconut Grove Building For First Location

Hines Spends $170.5M On Mixed-Use Portfolio In Dallas' Bishop Arts District

Local Investor Pays $30M For Block 37 In Heart Of Downtown Chicago

M Core Extends Its Retail Shopping Spree

Oprah-Backed Health Food Chain Files For Bankruptcy, Seeks To Exit Leases

Federal Realty Spends $508M On Alabama Power Center