By Tim Hunt
Challenges for retailers are reflected in Pleasanton's revenuesUploaded: Aug 29, 2017
Pleasanton officials are starting to sound the alarm about the effects of online shopping plus regional competition on the city’s sales tax revenue.
Mayor Jerry Thorne cited these concerns during the Tri-Valley Mayor’s Forum last week, while City Manager Nelson Fialho expanded on them at an earlier meeting of retired church-going men.
Pamela Ott, the city’s economic development director, shared the 10-year sales tax revenues for Stoneridge Shopping Center with me. Those revenues hit a pre-recession high of $4.4 million in the fiscal year ending in June 2007. They had fallen to $3.9 million by 2009 and then climbed back to an all-time high of $4.6 million in 2-014. The concern for city leaders is that revenues fell to $4.3 million despite a very healthy economy in 2016 (figures for 2017 are not available).
The companies with the anchor retail stores at Stoneridge are struggling across the country and closing stores that are not profitable. Sears and J. C. Penney are having a particularly hard time, but Macy’s and Nordstrom are not immune. The changes driven by online shopping and the shift in shopping behavior is taking its toll. Many women and teen-agers no longer consider hanging out at the mall a leisure time activity.
Macy’s already has announced it is closing its men’s store off Union Square in San Francisco and exploring other uses for some of its flagship store on Union Square.
Consider the big box sporting goods stores—only Dick’s Sporting Goods is still operating. Both Sports Authority (Dublin) and Sports Chalet (Pleasanton) have closed their stores.
There’s a profound shift in the retail environment and shoppers are looking for something different than the traditional enclosed mall. If you check out the website for Simon’s stores (owners of both Stoneridge and the factory outlets), it stressed the “Simon experience.” LINK” http://business.simon.com/about
That shift also is being seen in the City Center Bishop Ranch that will mix retail, restaurants and entertainment with an open plaza. It’s designed by celebrity architect Renzo Piano. The goal is creating an environment and space that people will want to return to routinely, not just when they want to go shopping.
Dublin has a similar concept in progress for the long-vacant parcel at the corner of I-580 and Tassajara Road that has been owned for decades by the John Di Manto family. The 76-acre parcel is being dubbed “At Dublin.”
The partnership of Shea Properties and SCS Development is proposing an entertainment-focused environment with movie theaters, a public plaza, a village green plus hotels and housing. In an East Bay Times article, Brad Deck of Shea is quoted, “This is experiential retail, we want this to be an experience. This will have more of an urban feel that you typically see in a suburban area.”
The Dublin project will have up to 400,000 square feet of retail and entertainment that will also include a bowling alley. The developers hope to line up tenants that will provide quality meals before or after the movies.
The proposal, which has not been submitted to the city, also is planned to include 700 units of housing.
This is the type of competition, plus the San Francisco Bay Outlets, that Stoneridge is facing. Under Simon’s ownership, Stoneridge has broadened its restaurant offerings, but it could really use an entertainment feature as a drawing card. For malls, it’s coming full circle. SunValley in Concord opened with a food court and entertainment that was phased out long ago. It’s time to bring it back.
One retail sector that is flourishing is the low-price stores such as Ross Stores and TJX (TJ Maxx and Marshalls). For the second quarter, Ross sales increased 4 percent, while TXJ was up 3.0. By contrast, Macy’s was off 2.8 percent. J.C. Penney and Kohl’s were also down.
Having been part of an industry that has been wrecked by the Internet—traditional newspapers—I can appreciate what is going on for major retailers and shopping centers. Advertising revenue for newspapers hit its all-time high in 2006 and has dropped every quarter since then.
It’s going to take a major shift in strategy for the traditional retailers to continue to survive—let alone flourish—in today’s new market.