U.S. has ten times more retail space (per capita) than Germany

We are a nation of mall rats, according to “What in the World Is Causing the Retail Meltdown of 2017?” (Atlantic)

By one measure of consumerist plentitude—shopping center “gross leasable area”—the U.S. has 40 percent more shopping space per capita than Canada, five times more the the UK, and ten times more than Germany.

Now it is clear why our Ft. Lauderdale rental condo (more than $4,000 per week) contained a $20 set of Farberware knives:

In 2016, for the first time ever, Americans spent more money in restaurants and bars than at grocery stores.

Maybe don’t buy that commercial REIT right now…

Once autonomous vehicles are cheap, safe, and plentiful, retail and logistics companies could buy up millions, seeing that cars can be stores and streets are the ultimate real estate. In fact, self-driving cars could make shopping space nearly obsolete in some areas. CVS could have hundreds of self-driving minivans stocked with merchandise roving the suburbs all day and night, ready to be summoned to somebody’s home by smartphone. A new luxury-watch brand in 2025 might not spring for an Upper East Side storefront, but maybe its autonomous showroom vehicle could circle the neighborhood, waiting to be summoned to the doorstep of a tony apartment building. Autonomous retail will create new conveniences, and traffic headaches, require new regulations and inspire new business strategies that could take even more businesses out of commercial real estate.

Readers: What do you think? For every current robocall will there be a visit to our driveway tomorrow by a robovan? The doors will open and a loudspeaker on the roof will say “Dear Homeowner: please come out and look at the solar panels you could add to your roof”?

18 Comments »

  1. TimB

    April 18, 2017 @ 2:19 pm

    1

    We’ll surely get there with driverless vehicles and drones -but Amazon has an ever-increasing role in this in the present.

  2. jack crossfire

    April 18, 2017 @ 2:44 pm

    2

    Basically, the government created mountains of free credit to fund construction & stimulate the economy after 2009. Supply & demand have to die to keep us all employed. Well, it’s been 13 years of autonomous cars being just around the corner. We might get to cars driving themselves from 1 freeway exit to another, in a few more years.

  3. superMike

    April 18, 2017 @ 4:00 pm

    3

    Is this another Philg-style “things that Americans are very inefficient at” thing in disguise? Germany might be a little austere, but certainly France, the UK, and Italy are shopping destinations, and certainly seem to meet their residents’ shopping needs, while using a small fraction of the space we do. I wonder if it’s skewed by how cheap real estate is in the center of the country? I saw a crate and barrel in Texas that was the size of a whole department store (and a department store the size of a whole mall)
    On the other hand, apparently Singapore is second on the list, and they’re usually pretty efficient with space and money.

    Singapore mentioned:
    http://gulfnews.com/news/uae/general/dubai-ranked-among-world-s-top-in-terms-of-per-capita-retail-space-1.363565

  4. tc>

    April 18, 2017 @ 4:11 pm

    4

    The self driving van of solar panels is the return of the traveling salesman. The problem is, nobody is home. Amazon, Safeway and Giant all offer to bring me stuff with current human-driven cars. They all have minimum orders and delivery charges, and they schedule like the cable guy, with a few hours in their window. Meh.

    For things I buy online, I don’t care if the delivery is by human driver, robot driver, robot flier or Star Trek transporter. Coming to my house to harass me won’t work, because either it will piss me off, or I won’t be there.

    I would like to be able to shop online and get stuff brought to me. Unfortunately, my typical grocery store trip is about half what Giant has for a minimum purchase, and I don’t trust them to pick unbruised apples and bananas. The delivery has to be on my schedule, not theirs. (A “summon groceries” button probably reveals more about my background than it does about how Giant should plan their business model.)

    That may happen, but it’s not self-driving vans that enable what I want.

  5. bobbybobbob

    April 18, 2017 @ 5:42 pm

    5

    “Deliver Everything” via a huge “Just In Time” logistics chain is incredibly energy inefficient. It basically amounts to substituting energy costs for warehousing and retail space costs. Energy availability is going to slap everyone upside the head in upcoming years.

    So, no, physical retail won’t we be going away in favor of more and more deliveries ordered via internet and delivered by drone. Probably the opposite, in fact. Probably a decade from now the shipping costs will be enough higher that people will mostly figure out how to stop somewhere and pick up what they need in bulk.

    The USA is ridiculously over retailed. There is going to be way less retail space *and* less web ordering.

  6. Bill

    April 18, 2017 @ 7:46 pm

    6

    It is just hard to make living selling retail in the UK or France or the EU. There are tons of regulations and hours limits and pricing rules and lots of red tape. So that limits the profits. Same for lots of stores over there. They are just not allowed due to regulations. Not so in the US. Anyone can start a store and make ther own sales rules.

    Back when in the US in 1970-80 any retail store was a place to print money. Sales were soaring and customers were everywhere. So we as a whole country overbuilt lots of retail on every block and in every town. Then the big boxes came along and we built more. But the small stores and retail space were still there. And now e-retail is building even more. So something has to give. Small retail was going away due to the big boxes. Now the malls are going away due to big boxes and e-retail. Plus lots of small stores were already empty and now lots of mall stores are going to set empty. Sort of like the steel factories in the mid-west. There is just a lot of space that is going to set empty and degrade.

    The question I have is rents for retail space. Right now rents are sky high and rising. Small retailers in Tahoe are screaming. So will all this surplus space cause rents to go down? Will some of this vacant retail space become housing rentals in cities with apartment shortages? Or is this space a developer dream to tear stuff down and redo it?

  7. Crazytrainmatt

    April 18, 2017 @ 11:07 pm

    7

    A typical america supermarket has 15 choices for everything and a whole bunch of high-profit processed stuff. A European supermarket fits the same selection into a tiny fraction of the space (though there are more and more American-stye ones outside the city even there). And don’t forget the seas of parking surrounding most US retail which consume resources in a number of ways.

  8. sabbir@clipping path service

    April 19, 2017 @ 1:39 am

    8

    Small retail was going away due to the big boxes. Now the malls are going away due to big boxes and e-retail. Plus lots of small stores were already empty and now lots of mall stores are going to set empty. Sort of like the steel factories in the mid-west. There is just a lot of space that is going to set empty and degrade.

  9. Chris Nahr

    April 19, 2017 @ 4:37 am

    9

    Agree with Crazytrainmatt. “Gross leasable area” sounds like it would include parking lots, so I’m guessing that’s where most of this difference comes from. Much retail space in Germany is still in the cities with little or no dedicated parking, not in suburban areas surrounded by vast parking lots.

  10. bjdubbs

    April 19, 2017 @ 8:39 am

    10

    Malls have gone downscale. People who live in small living spaces (poor people) tend to go to the mall to hang out as entertainment, especially on weekends. That drives away wealthy people who have money and who decide to shop online. And once a mall goes downscale it never comes back. Chris Rock used to joke that there were two malls in any city, the white people’s mall and the mall the white people used to go to. Now that’s pretty much every mall.

  11. Neal

    April 19, 2017 @ 10:10 am

    11

    @jack crossfire: To my untrained eye the construction spending trend before and after 2009 looks similar.

    https://fred.stlouisfed.org/series/TTLCONS

  12. the other Donald

    April 19, 2017 @ 10:25 am

    12

    Somewhere there is a huge server farm (Fed?) stuffed with commercial RE debt, alongside the servers still stuffed with subprime mortgage debt. When it blows up it will be 2009 again.

  13. philg

    April 19, 2017 @ 2:09 pm

    13

    Neal: Construction spending has been the same before and after a complete collapse of the economy? And the crazy boom spending of 2006 has been extended indefinitely? If accurate, I don’t see how you would get those numbers without the government distorting the economy. Absent a flood of immigrants, in a market economy people would cut back on building once it had become clear that per-capita economic growth was non-existent.

  14. Pepe vulgaris

    April 20, 2017 @ 8:37 am

    14

    > $4000/week condo has bargain basement knives

    I’m surprised this is a surprise.

    Does the landlord expect people who drop $4000 on a weekly vacation rental to use the knives in the place to do more than cut a pizza? I expect they’re expected either to hire a private chef, who’ll bring his own, or be ridiculous foodies, who bring their own, or order takeout, if they’re eating in the rental at all.

    A genuinely nice set would probably get destroyed immediately by people trying to pry lids off jars, chip ice, cut tags off clothing, saber open bottles of booze, etc.

  15. Neal

    April 20, 2017 @ 10:33 am

    15

    @philg: According to the chart I sited, per-capita construction spending has been growing since 1992. The most severe increase occurred during the “crazy boom spending of 2006”. The growth since the great recession correction still leaves us slightly below the long term trend line. Whatever is going on, attributing it to “the government created mountains of free credit to fund construction & stimulate the economy after 2009” is not really supported by the data.

  16. GermanL

    April 20, 2017 @ 2:43 pm

    16

    @Neal

    On the contrary, the graph you posted shows another bubble is coming.

  17. Neal

    April 20, 2017 @ 4:55 pm

    17

    @GermanL – Perhaps; when adjusted for inflation and population growth current spending levels are much less extreme than the pre-great recession levels.

  18. Colin

    April 27, 2017 @ 1:21 pm

    18

    Also note living space per capita is much larger in the US at 832 ft^2 vs 587 ft^2 in Germany.

    Source first Google hit: http://shrinkthatfootprint.com/how-big-is-a-house

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