Strip malls such as this one in Murrieta give immigrants a foothold in entrepreneurship, said Ray Young. (Photo by Frank Bellino/ SCNG file photo)Strip malls such as this one in Costa Mesa, which often contain personal care services, are a big part of Orange County’s retail landscape. (Photo by Christine Cotter/SCNG file photo)Community centers, bigger than strip malls, typically contain one or more big box stores and draw from 4 to 6 miles away, said Cal State Fullerton professor emeritus Ray Young. (Photo by Leo Jarzomb, SGV Tribune/ SCNG)South Coast Plaza, a super regional mall, draws tourists from as far away as China and Korea. (Photo by Nick Agro, Orange County Register/SCNG)Events such as the annual Shop and Dine Week celebration at the Orchard Shopping Center in Lake Forest make malls a social destination, says Cal State Fullerton professor emeritus Ray Young. (Photo by Jeff Antenore, Contributing Photographer)Walmart stores, such as this one at the Village at Orange, are taking over spaces vacated by departed retailers, says Cal State Fullerton professor emeritus Ray Young. (Photo by Paul Rodriguez, Orange County Register/SCNG)A Walmart Neighborhood Market on Beach Boulevard near Garden Grove Boulevard is part of the retailer’s strategy toward smaller stores. (Photo by Paul Rodriguez, Orange County Register/SCNG)An Amazon robot carries a portable storage unit at the Amazon fulfillment center in Tracy in April 2016. Such innovations have helped propel the online retail giant, said CSUF professor emeritus Ray Young. (Photo by Doug Duran/Bay Area News Group)Show Caption of Expand
“Whatever happened to Bullock’s?”
That question posed by Cal State Fullerton geography professor emeritus Ray Young might sound like nostalgic yearnings geared to his largely senior audience at a recent Osher Lifelong Learning Institute lecture.
But it’s really the question still at the heart of Orange County’s retail market health, he said.
Because what happened to Bullock’s – and Robinson’s, the May Co., Mervyn’s and other local retail stalwarts of the mid- to late 20th century – is still happening to our legacy chains today, Young said. Macy’s, J.C. Penney, Sears and Kmart have been closing stores, not just in forgotten pockets of the country but right here in the retail stronghold of Orange County.
And while an easy response to that decline might be to blame online retailers such as Amazon, the real challenge posed to the health of our local shopping centers isn’t so cut and dried, Young said.
Multiple forces have contributed to the closure of Southern California’s stores, he said, and not just the big national chains. He mentioned Hinshaw’s, which drew North County shoppers until the early 1990s, eliciting fond sighs from several in the audience.
“I would caution against making a sweeping assumption that online retailing has been the major culprit behind loss of customers at major department stores,” Young said in an email after his talk.
“In Orange County, primary diversion forces drawing customers away from ‘legacy general merchandisers’ since the mid-1990s have been the opening of key discounters such as Costco, Target and Walmart, coupled with a relative stagnation of household incomes since the Great Recession of 2007-09.”
Young is an urban geographer, studying what he calls the internal spatial structure of cities (think major types of land uses). He is particularly interested in urban retail patterns.
Cal State Fullerton geography professor emeritus Ray Young. (Photo courtesy of Cal State Fullerton)“Retail holds a fascination for me because it is central to our everyday behaviors since we are consumers of what it offers, and yet we take the retail landscape for granted, seldom thinking about why the retail areas are the way they are and how they may be changing,” he said.
Competition has risen sharply in the O.C. retail landscape since the mid-1990s, he said. Costco and Target pull a large share of middle- and upper-middle-class households away from the legacy department stores. Walmart draws moderate and lower-income householders.
Since 2000, Orange County has seen the completion or major renovation of seven large-scale shopping centers, Young said in his talk. Six included a Target or Costco as anchors.
“Discounters have come to the mall because shoppers are going to the discounters,” he said.
Young warns those quick to point to low prices as the only factor drawing shoppers to discount chains.
Walmart, he said, also draws shoppers with variety of goods and services as well as long hours. It’s innovative, opening neighborhood markets where chain supermarkets have closed, as Target is now doing with its “target” store on East Chapman Avenue in Orange (he points out the small type signals the small store).
Young illustrated the shifting fates with a photo of the only remaining Kmart in Orange County – in Costa Mesa – contrasted with photos of full parking lots and long gas lines at Costco. “On Wednesday midafternoon – I counted 41 cars at 2:30!”
Individual discount stores have blossomed into power centers, with two or more so-called big-box retailers.
“Discounters are starting to cluster in ways we didn’t imagine,” Young said. La Habra, he said, enjoyed a big turnaround sparked by Westridge Plaza, a center with a Walmart, Sam’s Club, Bed Bath & Beyond and Lowe’s.
Price-point stores, such as 99 Cents Only and Dollar Tree – a sector that didn’t even exist 25 years ago – have likewise pulled in shoppers’ dollars.
Then Young addressed what he called the elephant in the room: online sales and Amazon in particular.
Everyone knows how online shopping has grown. While total U.S. retail sales increased a healthy 4.1 percent in the second quarter from the same period a year earlier, online sales jumped 16.2 percent, according to the U.S. Census Bureau.
Young detailed some of Amazon’s pioneering efforts, such as the Kindle e-reader, 1-Click ordering, recommendations based on a customer’s buying patterns, the Alexa personal assistant, robots in its fulfillment centers, as well as reviving brick-and-mortar stores and constant diversification.
“They are innovators,” he said. The company has grown so large that just its web services subsidiary alone generates about as much revenue as all of Nordstrom.
Retailers including Nordstrom and Macy’s have taken proactive steps to capture more online purchases, Young said. One out of every four dollars spent at Nordstrom is spent online, according to the company.
And many retailers have made it easier for shoppers to purchase online and pick up in the store, or shop in person but buy by phone while in the store, for example.
But as much as online sales have soared, they account for only about 9 percent of total retail sales, according to the Census Bureau, “much smaller than most people believe,” Young said.
He pointed to a Pew Research Center study from December showing just 42 percent of Americans say the convenience of not having to make a trip to the store is an important factor to them in where they shop. More important were comparing prices, knowing the store or seller, reading ratings or reviews, and seeing or trying out the product.
Some 65 percent of online shoppers, the survey said, indicate they prefer to buy from physical stores.
Given those results, Young wonders how successful Amazon will be in its recent foray into selling Kenmore appliances (always the domain of Sears). Eighty-five percent of respondents said they’d rather buy large appliances in the store.
So as the trends toward online and discount shopping continue, where does Orange County’s retail stand? Young asked.
“Retailing in O.C. is healthy, though the market is probably saturated” as we reach a stage of maturity, he said. Other legacy stores will close, and some centers will be at risk. “Change is inevitable. The question is how businesses respond to that change, how governments will respond, how you and I as consumers will respond to those changes?”
As large stores close, shopping centers are getting innovative at filling the space, including subdividing it into smaller shops or food courts. Entertainment venues such as bowling alleys or skate parks are brought in. Revenue generators such as kiosks and car detailing services pop up. Some malls are turning part of their parking lots into four- to five-story apartment complexes.
“It’s so different from the landscape we are accustomed to viewing,” he said.
And while Young and others might think the county is already overbuilt, changing land use provides new opportunities, even when the population doesn’t grow.
“Some of you might have worked for Chevron,” Young told the audience. Its research center in La Habra is now the site of Westbridge Plaza. The former Marine Corps Air Station Tustin is now the site of The District at Tustin Legacy, Los Alamitos Race Course in Cypress now sports a Costco and 24 Hour Fitness in its parking lot, and the old Hughes facility in Fullerton is now a Target.
“It depends on the choices we make. What kind of experiences do we want?” Young concluded. You can dine while watching a movie or look at a koi pond with your grandkids.”
“It’s more about experiences than the stuff.”
Osher Lifelong Learning Institute, a CSUF-chartered program, offers a full calendar of class offerings, as well as social, recreational and travel opportunities geared toward active, older adults. The next program is Dec. 7: “Political Women: Recording Stories of Local Women Making Change,” presented by Natalie Fousekis, CSUF professor of history and director of the Lawrence de Graaf Center for Oral and Public History. For more information, go online or call 657-278-2446.