https://www.theguardian.com/cities/2018/jul/04/in-big-tech-v-big-retail-the-real-losers-are-store-workers-sears-amazon?CMP=Share_iOSApp_Other

Links below the article talk about subsidies for corporate finance department at the expense of normal revenue streams that support local schools, fire, police, health, roads, etc.

Special interests of corporate profits winning out vs general population.
Yet, when it's the corporate profit dept that is negotiating the deals and not the backbone of society negotiating, who do you think is going to win.
Interesting trend.

bearister said:

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https://www.theguardian.com/cities/2018/jul/04/in-big-tech-v-big-retail-the-real-losers-are-store-workers-sears-amazon?CMP=Share_iOSApp_Other

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Bearister, your one interesting guy.

We own retail, and tenant selection has become a science. There are certain things people will come out of the house for: food (restaurants, and markets which now provide various services), services, speciality retail (I have to try it and need customer support), toy stores, especially for adults like REI, booze, banks, and will you get the picture. Basic big box department stores are on the wane, and the anchor that used to be so valuable, not so much anymore (a Nordstrom or Costco is, but most are not, and we have several Whole Foods which we think are better magnets than say a Macy's. So part of the problem is that landlords look at big box retailer as a dinosaur and now charge them higher rent, as there more risk. A double whammy with the internet.

Edit: The latest SCOTUS decision hurts smaller internet sales companies, but the big guys like Amazon already charge sales tax. It will help retail some, but not much IMO.

Anyway, my two cents.

Wife:
Reading your initial, I was going to ask what your opinion is of Costco, Home Depot, Lowe's. Those are "big box", no? With a lot of their inventory (HD...) you have to go in and look at the parts to make sure they fit your application.

The other thought your post prompted was why would you charge more for "big box" (dinosaur) anchors. So long as they are paying rent, shouldn't anybody's money count as much as the next? I realize this is a very ignorant question, as part of the goal would be to get lots of customers in your space, thus increasing demand for it when slots open up. But feel free to expand on that. Thanks.

Good catch, okaydo.

Amazon is your new master and the new Walmart. Bow down and grovel...but remember Prime Day is coming so load up on crap because it's cheap and YOU WANT IT!

If it were up to me we wouldn't shop at Amazon except for things we can't get elsewhere. But it's not up to me. My wife loves her Amazon account.

concordtom said:

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Wife:
Reading your initial, I was going to ask what your opinion is of Costco, Home Depot, Lowe's. Those are "big box", no? With a lot of their inventory (HD...) you have to go in and look at the parts to make sure they fit your application.

The other thought your post prompted was why would you charge more for "big box" (dinosaur) anchors. So long as they are paying rent, shouldn't anybody's money count as much as the next? I realize this is a very ignorant question, as part of the goal would be to get lots of customers in your space, thus increasing demand for it when slots open up. But feel free to expand on that. Thanks.

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Yes, investor cap rates are a function of tenant credit rating and risk. That means an institutional landlord must demand higher rents for more risk to maintain the value of their property. The dinosaur that goes under, shuts down, or stopes generating foot traffic, means a vacancy for some time and/or potential failed shopping center. The more risk, the greater the loss for valuation purposes. BTW, Home Depot is a good anchor is the right demographic location. What is really been hit by the internet has been clothing retailers such as Department Stores, Limited, J. Crews, of the world, and traditional retailers like Sears, K-Mart, etc.

I buy a hella a lot of things at Amazon. The great thing is, to me, the user reviews. You can really tell if a product is good or not (if you know how to tell when reviews are real or fake).

Also, it's easy (for me) to return non-defective stuff you don't like, and you have a one month window Just drop it off at the Amazon store at USC or UCLA.

Also, Amazon allows you to, say purchase something tonight, Wednesday late night, and pick it up on Thursday at USC or UCLA with no extra charge, if you're a prime member.

Of course, I also buy stuff on Walmart. It's just so convenient since there aren't many Walmarts nearby me -- see my rant below.

It's best to price compare. Because Amazon isn't always cheap.

Like, for instance:

Yeah, I was gonna say, I do a lot of price comparisons, and been surprised lately how Amazon is full retail price often! Or more. It used to be cheap, now a convenience to have it delivered.

We live a bit in the boonies and it amazes me all the deliveries people have to make. And there's no extra charge for mileage. But, that's one less errand to run.

Hey okaydo, did you upload those photos from your hard drive? I thought that feature was eliminated and we can only provide URL links now.

Bearister, there is an interesting article today in the WSJ about how their was a recent rise in the internet's share of retail sales from 9.1% to 9.6%. Also noted the decline in urban malls, other than in wealthy areas.

wifeisafurd said:

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Bearister, there is an interesting article today in the WSJ about how their was a recent rise in the internet's share of retail sales from 9.1% to 9.6%. Also noted the decline in urban malls, other than in wealthy areas.

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Thanks! Unfortunately I am not a subscriber so I am c@ck blocked from that read.

Specialty and luxury retail are thriving in certain areas, thank goodness (it's the business I'm in). Ironically, the smaller specialty stores that large retailers almost entirely killed off will be the model going forward for most. The days of huge stores with large inventories are almost over. Women, who are the driver for most of the department stores business are increasingly shopping online and with shopping services. Retailers are slowly figuring out that the shopping experience has to have some value adds such as really good service from knowledgeable salespeople. In other words, like the old days.

What is a "shopping service" that you speak of?

Net a Porter, etc.

NYCGOBEARS said:

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Specialty and luxury retail are thriving in certain areas, thank goodness (it's the business I'm in). Ironically, the smaller specialty stores that large retailers almost entirely killed off will be the model going forward for most. The days of huge stores with large inventories are almost over. Women, who are the driver for most of the department stores business are increasingly shopping online and with shopping services. Retailers are slowly figuring out that the shopping experience has to have some value adds such as really good service from knowledgeable salespeople. In other words, like the old days.

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The other aspect (for malls) is that indoor is on the wane, outdoor malls with speciality shops, activities and restaurants is good, even in locations with weather surprisingly (e.g. Salt Lake and Phoenix). Also, outlet centers work for women.