Retailers Struggle as Anchor Stores Exit Malls

Domino effect hits smaller businesses hard.

The departure of major tenants is triggering a worrying trend for smaller retailers. As anchor stores like supermarkets and cinemas vanish, other businesses are seeing reduced foot traffic and sales, threatening their viability.

The Anchor Effect

Mass-market retailers typically drive destination shopping, explained **Dr. Seshan Ramaswami**, associate professor of marketing education at Singapore Management University (SMU). Shoppers visit the mall specifically for these anchors, benefitting smaller stores.

When these key tenants close, difficult to recover, according to **Dr. Ramaswami**. The overall appeal of the mall diminishes, impacting all businesses.

Domino Effect

Retail expert **Dr. Samer Elhajjar**, a senior lecturer in marketing at the National University of Singapore’s (NUS) business school, suggests that one closure may lead to another, creating a domino effect.

Today’s consumers expect more than just shopping, said **Dr. Elhajjar**. They’re looking for immersive experiences, convenience and value. If a mall doesn’t evolve to meet those expectations especially when competitors nearby do, it becomes very difficult for tenants to remain viable.

Relying on Loyal Customers

**Giles Wang**, an optometrist at Eye Theory, which has operated in Leisure Park for 16 years, hopes for continued support from his clientele despite the loss of Cold Storage. The eyewear business depends on regulars to keep sales up.

One staff member at BedOrigin, **Ms. Goh**, observed a significant drop in foot traffic since Cold Storage closed, noting that most sales now come from regular customers. Some days see zero customers, so they are just waiting to see what happens.

Unsustainable Strategy

Depending on loyal customers isn’t viable long-term, according to **Dr. Elhajjar**. He added that the nature of retail and F&B today is such that customer churn is high, you constantly need new customers to offset those who naturally drop off due to changing habits, relocation or simply boredom.

The real challenge is that without anchor tenants like Cold Storage to drive new footfall, the opportunity to attract new customers narrows dramatically, **Dr. Elhajjar** stated.

While regular patrons act as life support, that approach will ultimately fail unless something structurally changes to re-attract footfall or reinvigorate the space.

Evolving Retail Landscape

Many malls are adapting by incorporating entertainment options. For example, the American Dream mall in New Jersey includes a theme park, water park, and aquarium to drive traffic beyond traditional retail (American Dream).