The following is from the June 28, 2011, edition of SmartMoney. SMU Marketing Professor Dan Howard provided expertise for this story.
July 9, 2011
By JONNELLE MARTE
7. "A tax break? Yes, please."
Even as malls struggle, cities and towns are working hard to attract major retailers and prop up flagging malls often with generous tax breaks or subsidies. For instance, when it seemed likely that the local West Valley Mall would go out of business, city officials in Tracy, Calif. decided last year to pay the mall developer $2.4 million to help cover the costs of Macy's moving in, according to Tracy city manager Leon Churchill.
This is common, says Daniel Howard, a professor of marketing in the Cox School of Business for Southern Methodist University. "Cities compete with one another for businesses," he says. On the table are perks like local tax breaks and subsidies, a fire-sale price for government property, and discounts that stretch into the future. . .
8. "Are your feet tired? Good."
Shopping malls are designed to make you walk from one end to the other maybe multiple times — before you're ready to go, analysts say. That's why major department stores, such as Sears, Bloomingdales and JCPenney, are strategically placed on opposite ends of the mall, says Howard. For decades, mall planners have also spread out similar stores, such as those aimed at children and those aimed at teenagers, to force people to cross the property before they can finish their trips. "The more goods you pass by on the way to get what you really came for, the more you're likely to buy," says Howard.
Read the full story.
# # #