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2,118); and Radio Shack (up to 550 units out of a total of 4,412). There are many similar examples.2 A recent article in The Globe and Mail, the Toronto-


based newspaper, indicated that Staples is planning to downsize almost 40 of its 330 stores in Canada, partially due to the effect of e-commerce. Best Buy Canada is closing 15 of its nearly 230 stores in Canada for the same reason.3 The large stores used to offer the best prices in many retail categories, but now the Internet beats all. Sears Canada continues to report declines in same-store sales (e.g., -5.8 % for Q4 2012 and -2.6% in Q1 2013). Rona, a Canadian home-improvement retailer, is shutting or shrinking several large-format stores, and some retailers, such as Old Navy, are now trying to franchise. Many retailers are considering smaller units that resemble showrooms more than stores. Some established retailers are simply not building as many, if any, new stores as they did in the past. A good example is Marks & Spencer, which announced in May 2013 that it would not build any additional stores in its home territory, the United Kingdom.4 The United Kingdom has one of the highest e- commerce penetration rates in the world.5 On the positive side, in the United States as well as in


Canada, many existing shopping centers are being modernized and upgraded, although few new centers are planned. New retailers are entering some markets, and existing stores demand increased energy efficiency and “greening,” requiring new investments in shopping centers. In Canada, Target is opening 124 new stores, replacing a much larger number of Zellers stores that were closed, and Nordstrom is entering the nation by opening four full-line new stores with the potential for eight to 10 full-line stores and 15 to 20 Nordstrom Rack stores.6 Retailing in North America is not dead but it surely is changing.


The Retail Service Space Ratio The retail service ratio expresses the total retail or


shopping-center space on a per-capita basis. For the United States, ICSC estimates 2012 total retail space at 53.5 square feet (sf) per capita and shopping-center space at 23.8 sf per capita, or about 45% of total retail space.7 In Canada, total retail and related service space ranges


between 30 and 50 sf per capita depending on location (e.g., urban vs. rural). Total shopping-center space in the nation amounts to 14.7 sf per capita.8


The Size of E-commerce Total 2012 e-commerce sales in the United States


amounted to US$225.3 billion, about 16% more than 2011. In comparison, total retail sales increased by 5% from 2011 to 2012, including much faster growth in the e- commerce category. E-commerce represented only 2.0% of total unadjusted retail sales for the fourth quarter of 2003 but grew to 6.2% by the end of 2012.9 Forrester Research, an American technology and


market-research company, projects e-commerce sales in the United States for 2017 at $370 billion, which would represent about 10% of total retail sales.10 Although approximately 90% of retail sales will still be in the traditional format, US$370 billion in sales, at an estimated average productivity of US$400 per sf (all retail space, not just shopping centers), is equivalent to 925 million sf of bricks-and-mortar selling space that either may no longer be necessary or may need to be re-deployed with other products or services, assuming no dramatic demand change (from income, population, market share, etc.). Due to the uncertain definition of e-commerce in


Canada, currently available sales statistics for that measure are considered “soft” numbers that should be viewed with caution.11 Nevertheless, they can serve to illustrate the magnitude of the likely future impact.


2 Douglas A. McIntyre, Samuel Weigley, Alexander E.M. Hess and Michael B. Sauter, “Retailers That Will Close the Most Stores,” USA Today,


February 3, 2013, retrieved June 3, 2013. 3 Marina Strauss, “Staples Looks to Downsize 39 Stores,” The Globe and Mail, April 10, 2013, retrieved June 3, 2013. 4 Sean Poulter and Rupert Steiner, “M&S Gives Up on Building New Stores: Retailer Will Stop Construction in Three Years As Customers


Increasingly Buy Goods Online,” The Daily Mail, May 21, 2013, retrieved June 3, 2013. 5 Forrester Research, Online Retail Forecast, 2012 to 2017, March 13, 2013. 6 Nordstrom, Annual Report 2012. Seattle, Wash.: Nordstrom, 2013. Nordstrom: Investor Relations, SEC Filings, Form 10K. 2013. March 18, 2013,


retrieved June 3, 2013. 7 International Council of Shopping Centers, eData, “United States Country Fact Sheet,” retrieved June 13, 2013. GLA estimates: Copyright CoStar


Realty Information, Inc. 8 International Council of Shopping Centers, eData, “Canada Country Fact Sheet,” retrieved June 13, 2013. GLA estimates: Ivanhoe Cambridge and


International Council of Shopping Centers. 9 U.S. Census Bureau, Annual Revision of Monthly Retail and Food Services: Sales and Inventories—January 1992 Through April 2013: E-Commerce


Time Series available in Excel Format: Not Adjusted Sales, retrieved June 4, 2013. 10 Mashable.com, “Forrester U.S. e-Commerce Forecast 2017,” March 12, 2013. 11 See, for instance, Statistics Canada, “Retail Non-Store Survey,” record 2448, retrieved June 12, 2013, for a description of “Internet retailing


activities.” INTERNATIONAL COUNCIL OF SHOPPING CENTERS 12 2 RETAIL PROPERTY INSIGHTS VOL. 20, NO. 2, 2013


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