Retail Dogma

Anchor Store

An anchor store is a big retail store, often a department store or a supermarket, that drives traffic to the mall, due to its brand recognition and large customer base.

They are often referred to as “anchor tenants” or “key tenants”, due to their major role in the success and appeal of the mall.

The Role of The Anchor Store

Anchor stores are beneficial for the mall developers, as well as smaller retailers in the mall.

The mall developers often use their roster of anchor tenants to sell the remaining space at the mall before its opening.

You will find that the mall map always highlights the anchor tenants, and the proximity of the store to those tenants plays a role in pricing the retail space.

Anchor store in mall map

In addition to that, anchor stores tend to appeal to a wide variety of customers, due to the fact that they carry a wide range of merchandise. This is what gives them the ability to drive high traffic to the location.

For other retailers, anchor stores available at the mall help in brining traffic to their own stores and save on their marketing spend.

Small retailers go for mall locations to benefit from the organic traffic that comes to the mall, driven by the mall marketing efforts, as well as other big brands’ marketing and customer flow.

Many small retailers even require a clause in their lease, called the “anchor clause”, which allows them to terminate their contract if the anchor store at the mall closes or doesn’t open within the agreed time frame.

Why Does The Anchor Store Pay Less?

Due to their high bargaining power, and their ability to make or break the mall, anchor stores are always offered lower rents vs. smaller retailers.

Most of the time, anchor tenants get approached by the developers first, and get offered the best locations at the mall, as well as the most attractive rates and lease terms.

A D V E R T I S E M E N T

Another reason they pay less, is that they rent a large space, and so this gives them the right to lower rates.

Anchor Store Examples

Anchor stores differ from one country to the other.

In the United States anchor store examples are:

  • Macy’s
  • Nordstorm
  • JCPenny

Other examples at other countries are:

  • Carrefour
  • Zara
  • H&M
  • Marks & Spencer

Considerations

If you are starting a retail business and exploring all the options for a retail space for your brand, there are some things to consider when it comes to anchor tenants.

Not all anchor stores bring the same type of customers, and so you want to evaluate what type of brand positioning you have (luxury, premium, value,..etc) and based on that draw a persona for the type of customer that you are serving.

Then imagine what other brands this customer would be shopping at, and which of those brands are anchor brands.

Based on this analysis, start evaluating malls based on the mix of tenants they have that match the brand mix that your customer persona shops at. This way, you will be getting, and paying for, the right traffic for your business.

Not all traffic is valuable traffic