Anchors and Externalities

Abstract

M. YEATES, A. CHARLES and K. JONES: and Externalities,, A central interest of business geomatics is externalities, particularly as the theory can be applied to the spatial clustering of consumer service enterprises that may individually be competitive with each other. Malls, as planned clusters of stores, are designed to maximize externality benefits for individual lessees. In particular, mall developers and operators provide special lease benefits for those stores (called anchors) that generate the greatest externality benefits for others. The magnitude of the externality benefits generated by anchors has proved difficult to estimate because malls are invariably opened with stores and anchors in situ. The recent purchase of a restructured T. Eaton Co. Ltd. by Sears Canada, which resulted in the closure of 64 Eaton's department stores in a number of malls, provides a unique situation, however, in which the inverse -- externality dis-benefits --may be estimated. The data on which the study is based has been derived from 18 malls, operated by a major Canadian shopping centre development company, which included an Eaton's department store as an anchor. The results demonstrate: the magnitude of dis-benefits associated with demise of Eaton's; the restricted spatial range of t he negative effects; and, the variations in impact by store type. The study has important practical implications with respect to negotiations of the magnitude and length of anchor leases; decisions concerning what types of stores may be placed in the 'anchor' category; and, the mall marketing mix. M. YEATES, A. CHARLES and K. JONES: [much less than] Anchors and Externalities [more greater than] [Les magasins cle et les effets extemes]. Un des interets principaux de La geomatique dans le domaine des affaires est tout ce qui touche aux effets extemes, particulierement etant donne que la theorie petit s'appliquer a la concentration d'entreprises foumissant des services a la consommation quand ces entreprises peuvent etre individuellement en competition les unes avec les autres. Les centres commerciatix--des concentrations de magasins planifiees--sont concus dans le but de maximiser les benefices provenant des effets externes pour les locataires individuels. En particulier, les promoteurs et les gerants des centres commerciaux octroient des avantages speciaux dans les contrats de location aux magasins (qu'on a nomme des magasins cle) qui generent les plus grands benefices provenant d'effets externes aux autres. L'ampleur des benefices provenant des effets externes generes par ces magasins cle a ete diffici le evaluer parce que les centres commerciaux sont inevitablement ouverts avec les magasins cle et les autres deja installes. Toutefois, l'achat recent de La compagnie restructuree de T. Eaton Co. Ltd. par Sears Canada, qui a eu pour consequence La fermeture de 64 succursales d'Eaton dans plusieurs centres cornmerciaux, presente une situation unique dans laquelle la situation inverse -- des desavantages d'effets extemes -- peuvent etre evalues. Les donnees sur lesquelles cette etude est basee proviennent de 18 centres commerciaux, geres par un des principaux promoteurs de centres commerciauX an Canada et dans lesquels ii y avait un magasin rayon d'Eaton comme magasin cle. Les resultats demontrent l'ampleur des desavantages associes avec la fermeture d'Eaton; le rayon geographique restreint des effets negatifs; et, les variations de l'impact par categorie de magasin. L presente des implications pratiques importantes par rapport aux negociation concemant l'importance et la longueur des baux de location pour les magasins cle, pour les decisions concernant les types de magasins qui peuvent etre classes comme magasin cle, et pour la composition des magasins dans un centre commercial. Introduction Since the days when merchants first traded and sold goods in the bazaars and markets of antiquity, it has been evident that the clustering of consumer service activities in particular locations conveys advantages. …

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