A fan favorite discount retailer is going after retail space, that most companies are shying away from at this time, malls. Simon Property Group’s (SPG) mall locations were impacted by the closing of some major retail department stores like Sears, who had been around for over 100 years. Even the closure of Bed Bath and Beyond will open a handful of locations in Simon properties.
Simon properties has made use of its vacancies even with a study done two years ago showing that roughly one out of every four shopping malls would be closed within three to five years. Surprisingly, companies are still showing interest in being in mall locations. The mall giant has welcome new retailers that had previously only had an online presence.
Shops for retailers like Pact, Goodlife, True Classic, and ThirdLove offer new options with a brick-and-mortar store front, where shoppers can try on before you buy, without the hassle of shipping and possible return shipping inconveniences. The online retailers blossomed during the pandemic where retail store fronts struggled, especially ones inside malls. Strip mall stores were able to offer services, like curbside pickup and that helped a lot of people to continue shopping when covid restrictions were placed and recommended.
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Five Below Expands in an Unlikely Space
As a premier discount specialty store, Five Below (FIVE) has been bringing trends at reasonable prices to consumers since 2002. Most of the products sold a Five Below have been primarily between $1-$5 making it a prime retail location when consumers were feeling a pinch in their wallets over the pandemic and the inflation that followed.
Five Below has well over 1,000 retail locations, the majority of the locations are in strip malls, and it has plans to have more than 1,500 discount shops by the end of 2023. While Five Below has experienced some setbacks on plans to open the number of stores it had, it will still open them, just later in the year than originally planned. Five Below has routinely taken retail real estate in strip malls, which was helpful for curbside pickup through covid, but with the prime retail opportunities at Simon properties opening up at the same time, Five Below is expanding its footprint in retail.
Five Below already has 21 stores in Simon properties and is expected to open around 10 more this summer. The existing Five Below at Simon's Arundel Mills in Maryland will receive a full remodel and its success leads as an example of how the discount retailer and Simon properties are a good fit and are, “a natural extension of our commitment to growth," said Simon’s Senior Vice President of Leasing Paul Ajdaharian, according to Retail Dive.
Five Below will open more locations across the country in Pismo Beach Premium Outlets in Pismo Beach, Calif.; Great Mall of the Bay Area in Milpitas, Calif.; Indiana Premium Outlets in Edinburgh, Ind.; Albertville Premium Outlets and Miller Hill Mall in Minnesota; Pocono Premium Outlets in Pennsylvania; Gaffney Premium Outlets in South Carolina; and Pleasant Prairie Premium Outlets and Johnson Creek Premium Outlets in Wisconsin.
“Expansion to 3,500-plus stores is a key strategic pillar of our vision for growth, and our relationship with Simon is core to continuing our national expansion efforts,” said Five Below’s Chief Retail Officer George Hill, in Simon’s announcement.
Consumers OK to Spend More
Discount retailers like Five Below were able to track and analyze spending as more consumers found themselves wanting to spend less and shopped the retailer. Five Below used the influx of discount seeking consumers and started introducing products at higher prices, but still discounted compared to other retailers.
The introduction of items up to as much as $10 in the new Five Beyond section of the stores have given insight into shoppers' feelings about inflation, as many consumers have opted to buy the higher priced goods and not just the goods priced from $1-$5. When consumers are consistently opening their purse strings a little more it shows there is more willingness to either pay a higher price and or buy some more discretionary goods.
As consumers spend more, Five Below is expanding its product line and adding services. The expansion of the products in the Five Beyond has been proven success and existing stores are being restructured to fit the new price point inventory. Five Below has also added ear piercing and a balloon section. The balloon section is a step in competing with other party stores and further enticing new customers through its doors.
