The diminishing scarcity power of malls

During the glory days of the economy malls were full of shops; paying (almost) all their abnormal profit to the landowner who was able to demand a very high price and 10 to 20 year contracts because of his scarcity power – everyone wanted to buy a place for their shop in malls.

However, since the beginning of the recession the demand for commercial estate - especially in the USA- has plummeted and the landlords are not in a very powerful position anymore. The scarcity power they once had seems to be diminished:

“"It used to be that the landlord was in the driver's seat -- you used to beg to get into a mall," Cohen [ Marshal Cohen, chief industry analyst at market research for NPD group] said. Now, "the landlord is just happy to get anybody into a space."”

This gave to opportunity for this new phenomenon to enroll: ‘Pop-up’ stores.
Pop-up stores, also known as ‘quickie retail operations’, are stores that fill the gaps at recession-battered shopping centers for a fraction of the regular rents.

Surprisingly enough this is not something that only utilized by small companies trying out a new product or business model; it is also utilized by the bigger well known companies. Toy’s R Us Inc is setting up 80 of those pop-up shops and Gap Inc. recently opened a pop-up shop on trendy Robertson Boulevard to promote its new premium denim line.

According to the LA times this is a trend that could reshape USA’s landscape if it continues, diminishing the power of commercial landlords and making it easier for merchants to test new locations and products with little commitment.