In this episode of Retaili$tic, James Cook, Senior Director of Research at JLL, shares insights on the evolving retail landscape, including the resurgence of malls, entertainment-driven retail, grocery trends, and the impact of technology like AI and PropTech. Discover how consumer behavior, real estate strategies, and innovative concepts are shaping the future of retail.
Key topics
Resurgence of malls and entertainment concepts
Grocery store evolution and value shopping
Impact of AI and PropTech on retail real estate
Consumer behavior shifts and proximity effects
Revitalization strategies for dead malls
Luxury retail trends and customer focus
The role of pop-ups and short-term leases
Global retail insights from China and Mexico
Chapters
00:00 Introduction and Passion for Retail
02:57 The Evolution of Entertainment in Retail
05:36 Changing Consumer Relationships with Malls
08:18 The Grocery Landscape Transformation
10:46 The Rise of Discount Retailers
13:23 The Future of Drugstores
16:19 Department Stores: A Dying Concept?
18:52 Experiential Retail and Consumer Engagement
21:32 Emerging Retail Concepts and Trends
26:17 The Rise of Luckin Coffee
29:48 Consumer Expectations and Product Innovation
30:30 The Mall Experience in China
31:37 Food and Beverage Trends in Malls
33:13 Healthcare in Retail Spaces
33:57 The State of Luxury Retail
36:00 The Lightning Round Begins
42:44 Misconceptions in Retail Real Estate
44:29 Future Cities and Retail Opportunities
45:57 Pop-Ups: The Future of Retail Leasing
Philip Moore (00:00)
Welcome to Retaili$tic, the official podcast of Corsight Research for May 12, 2026. This week Deborah Weinswig welcomes James Cook, Senior Director of Research for the Americas at James Lang LaSalle, a global leader in commercial real estate consulting. They discuss the cultural and economic trends shaping the retail landscape today and in the near future.
But before we hear from Deborah and James, Dana is back to highlight some of the exciting research on offer from Corsight this week.
Dana (00:32)
Thanks, Philip.
Our American mall is making a comeback and what does that mean for retail real estate strategy? Our report of the week this week tackles that very question, the American mall renaissance. We're also covering the retail tech landscape across two deep dives, fresh U.S. consumer survey insights, the latest earnings analysis, and critical store tracker data for both the U.S. and the U.K. On the data side, U.S. retail sales for May and a quarterly look at the retail crime and shrink rounds out a packed week.
Plus, our premium subscriber call focuses on data insights and we close the week with the analyst quarter digging deeper into the mall story. If you're tracking where physical retail is heading, how technology is reshaping the supply chain, or what the numbers say about consumer spending right now, this is the week to tune in.
Philip Moore (01:19)
Thanks, Dana. Now here's Deborah and James.
Deborah Weinswig (01:22)
James, thank you so much for joining Retaili$tic today. We're so honored to have you with us.
James Cook (01:25)
Deb, any opportunity to talk with the great Deb Weinswig is a good day for me. So thanks for having me.
Deborah Weinswig (01:31)
You are so kind. I will say, James, you probably put out some of the best content and I look forward to watching all of your mall tours and store tours. What was it about kind of bringing that to life? Like, what was it that excited you? Because you do it from a place of passion as opposed to like, I'm trying to kind of, you know, be this creator. What was it that...
made you want to share kind of how you see things with others.
James Cook (01:57)
Yeah, so my actual job is I'm the head of retail research for North America at JLL. So I have a small team of researchers that tracks all of the retail and retail real estate trends. And so as you do at Coresight we write a lot of reports that we put months of our time into and that 20 people read maybe. So we were like, hey, we have such great insights that we're all passionate about. How do we get them out there?
And one day, and this is like 10 years ago, I started recording like five minute voice messages into my iPhone and posting them as quote unquote podcasts. Now 10 years later, we've got a weekly podcast called Where We Buy about retail real estate. And we're always posting videos when we travel. I'm really excited. I can't quite talk about it yet, but we're about to release a report about entertainment concepts that are expanding in North America.
And there's a lot more, like there's a lot more than you would think. You'd think, you know, the consumer's hurting, they're not spending on entertainment. There's a lot. I can't go into details yet because it's under media embargo until next week. But as a part of that, we'll go out and film fun videos at different entertainment concepts and post them on social media. And that's where people see most of our research is through these little short videos.
Deborah Weinswig (03:14)
Just for our audience, how do you define entertainment?
James Cook (03:18)
Yeah, so what I'm most passionate about is, I mean, big picture, anything that creates an experience I'm passionate about. So I love place making, I love mixed use projects that evoke a sense of place and authenticity. But one of the things, a subset of that is what we call location-based entertainment. And that is specifically,
You know a concept that you have to go somewhere to be entertained. It usually does not include movie theaters Although some people do include movie theaters, but it could be anything from speakeasy bar that has a mini golf course in it, know, it could be a new cool bowling alley something simple like like darts Or it could include include the new netflix house, which is basically, you know one of our thesis is that in the class a malls and lifestyle centers
apartment stores are going away and the new one of the new anchors is entertainment and that is literally the case Netflix house is going into former department stores Meow Wolf is going to level 99. There's a whole list of these awesome cool themed entertainment concepts that are going into former department store space.
Deborah Weinswig (04:24)
Do you think with that, that the consumer will spend more time in the malls, like per visit in addition, but maybe per visit is one. And then do you think they also increase their number of visits?
James Cook (04:32)
Thank
I don't know. think that the visits and dwell time at malls have been trending down, you know, over the past decades. I think that the reasons people go to the malls are just gonna be different, but it may be the same amount of time. It's just different. you know, I don't usually, like I used to buy suits at Nordstrom or something like that, and I don't do that as much anymore. So.
Maybe I go to the mall and do the stranger things experience at the Netflix house, you know, with my family or something like that.
Deborah Weinswig (05:09)
interesting point and as you start to think about the kind of this idea around I've heard a lot of recently around proximity how much do you think that's coming into play in terms of what malls people choose to go to or what experiences they choose to know where they're spending their time
James Cook (05:26)
Yeah, so this idea of location is actually like, ⁓ I got to be careful because this is officially an embargo this report, but I think I can get into this theme. this is like a big thesis for me. So the cost of a ticket to Disney World, like when it opened, even accounting for inflation was less than forty dollars. Right. It was really like four dollars. But, you know, inflation today for a family of four to go to Disney World for one day.
if you include food and lodging, we're talking thousands and thousands of dollars. So you now have to be like upper middle class, right? To do something that used to be a vacation anybody could do. So people are having to forego these expensive themed experiences in Orlando and Disneyland and Los Angeles and others, and instead going to more affordable entertainment experiences closer to home. And so that is happening.
Primarily like the great ones are happening in class a malls and lifestyle centers The others there's this whole like the biggest category is like trampoline parks and slide parks and fun zones and kids zones Those are going into what we call open-air centers, you know, so like Where you'd have your Costco and that kind of stuff, you know Could be a power center could be an open-air like could be a neighborhood community center Those are still not cheap
but they're much more affordable than taking that big trip to a theme park.
Deborah Weinswig (06:50)
And you know, it was funny, I was just in Montreal yesterday and we saw a few centers. One of them was Royal Mount, which is, you know, kind of this amazing, right? There's artwork and there's amazing sight lines. There's no columns and there's a big focus on food. And it really is like an experience. How, and it was, I was shocked. Like people literally were there, right? Like, you know, first thing in the morning, people are there eating.
like within 30 minutes of the mall opening, so they've literally gone there to like have a meal, right? And I'm just not used to seeing, right? It's usually like you're there to shop and then you have a meal because you're hungry. It's not that you're going to the mall to have a meal. And so how do you think that the consumer's relationship with where they shop is changing? And do they feel kind of a different level of affinity as you've...
from your data, does it suggest that they have a different level of affinity? And if so, what's driving that?
James Cook (07:47)
I don't necessarily have data on that, but I have intuition. Overall, we've had like the, just the quantity of say enclosed malls and lifestyle centers is declining. We just had way too many. Instead, you're now getting the one, you know, if it's a smaller market, you know, you might get the one or two great class A mall, class A lifestyle center. And a lot of the others are falling away and maybe becoming quote unquote dead malls or just being something else.
So the affinity, the brand of this one great mall, know, and if you're in Philly, you know, King of Prussia, you know, or, you know, for, you know, a lot of people it's like, my mall is Glendale Galleria, my mall is The Grove, you know, or even MOA, Mall of America, you know, every city's got the mall. And that means for the ones that survive, their percentage of brain share is really huge for people who live in the community.
Deborah Weinswig (08:39)
Actually a really interesting point. And do you think that the consumer, if you were to kind of list out what drives them to get in their car, drive to the mall, whether it's strip, open air, power center, et cetera, versus just kind of sitting at home and ordering from their couch, what is it that sparks that desire to kind of get up and go out?
James Cook (09:03)
Yeah, I mean, there's
two kinds of trips. There's the kind of entertainment trip, is where you're really going. Well, not entertainment exactly, but it's the fun discovery trip that you're doing to like the Lifestyle Center or the mall. And then there's the more daily needs trip. And that's all about price and convenience and availability. And, you know,
despite the fact that I know Deb you live in New York so probably you do all your grocery shopping online I would imagine right? But in the suburbs a lot of people still do the weekly big errands trip you know where they're driving to the grocery store they're going to Costco they're picking up all that stuff and they're still looking for a balance of price, selection and convenience and despite the fact that a lot of that stuff is available online it's still
It's still a little complicated to do your online. You know, we've been saying this for years, picking out the avocados online is still tricky, things like that. So there's still a real place for online shopping, even for daily needs items. I mean, I mean, there's a real place for in-person shopping for daily needs items. And then the other side of that coin is it's more expensive to shop online because it costs more to bring it to your house. So for all of the families that are feeling the pinch from
recent inflation and energy prices, the best deals for groceries are still to be found in person. So that's all in-person shopping as well.
Deborah Weinswig (10:28)
Well, it's interesting, right? We've seen, I would say, a significant change in terms of like the grocery landscape, right?
James Cook (10:35)
Yeah, absolutely. I mean, there's this onslaught of discounters taking up new space. mean, used to be, you know, grocery used to be dominated by regional players. Then it got kind of consolidated into a few big owners. And now all of the new grocery store openings are small footprint discount. A lot of Aldi, some Lidl grocery outlet, you know, all about value shopping.
⁓ And even, know, others beyond that, like like sprouts is a great example. know, sprouts, while it is positioned as like a healthier, you know, cleaner grocery store, it still has a value proposition alongside that as well, where it's not an expensive place to shop. So everybody that's expanding is taking an advantage. All the grocers that are expanding right now are taking advantage of that. A lot of shoppers are on a budget and they're looking for a deal.
Deborah Weinswig (11:28)
I mean, I think it goes back to, know, especially for grocery, right, the difference between online versus in person, right? There's like almost an inspiration that comes from being in the you know, kind of trying new product or, you know, just thinking about how you put things together in a different way. I try to go to the store. I eat a lot of fruits and vegetables and I do that whole thing. I do want to pick them myself. And, you know, in New York, we're fortunate enough that things are quite close. I mean, if I'm buying, you know...
not that I buy a of water bottles, but like that's not the easiest thing just to kind of like throw over your shoulder and walk home with. So, but I think that if you think about what drew people into the stores in the past and you look at, we can call it the value proposition now, you know, I feel like as I look at my mind's eye and I think back to when I was younger and I'd go to stores with my parents, right, there'd be all this sampling and right, you felt like it was like your neighborhood store, right?
And there was something amazing about that. like, you know, I remember my parents knew like the store managers, I mean, all of that. And so I think Walmart actually does a really good job of having the consumer feel like it's their Walmart. And I think they give the store managers a lot of leeway to do that. But if we look at the rest of grocery, what's kind of happening right now in the kind of, and obviously the Kroger Albertsons failed merger that I think changed.
a lot. I there's been a lot. There's been a lot. You had the demerger with Family Dollar, Dollar Tree. mean, it is for a sector that's usually not that exciting. It's been really exciting. Then, like you said, you've got the Aldi and Lidl. That's also been, I mean, there's like a bunch of Lidls now in New York City and there are like lines around the corner to go there. So, ⁓ yeah. And so I think it goes back to that it's still fairly novel.
James Cook (13:08)
Really? my gosh, I didn't know about that.
Deborah Weinswig (13:15)
And you don't like the, I mean, we used to call them like hard discounters, right? Having them in the city, Kind of, I mean, you've got them, you know, you've got an Aldi nothing else is like the, the Lidl's are a bit more convenient, at least for now. So why do think we're seeing so much change in grocery? What does, like, what can we learn from this, you know, hard discounter kind of asset class? do you think that centers change going forward because of grocery, if they do?
James Cook (13:42)
The it's all about, you know, this barbell economy. We're always talking about is that you've got to be targeting high or low right now. The middle. A lot of that's gone away. Speaking of targeting experience, though, I didn't mention this when we're talking about groceries. There are some real regional heroes out there. I'm thinking about H.E.B., ⁓ which if you want to talk about loyalty, man.
Deborah Weinswig (14:02)
All right, and.
James Cook (14:05)
people in Texas love HEB if they've got one. And then Publix too. And Publix is actually slowly expanding outside of just Florida and encroaching. They're going north, they're going west. So who knows, eventually maybe you'll even have a Publix in Manhattan. Yeah. And so their focus really is not on price alone. It's on overall there. I mean, it's overall good value, but it's fantastic experience, loyalty.
Deborah Weinswig (14:22)
I love that.
James Cook (14:32)
people love it. What does it mean for shopping centers? I mean, the hottest. So in general, people who invest in shopping centers right now, they're, or people who just invest in commercial real estate right now, they're kind of saying, hey, I don't want to invest in data centers. I don't want to invest in industrial as much as I did a few years ago, maybe not so much office. So a lot of money is turning to retail because there's still value in retail commercial real estate within that.
the hottest of the hot is the grocery anchored centers, which is hilarious because like 20 years ago, people were like, it's all going away, it's all going online, now it's the best investment to the point where it's really difficult to find one to buy. And when you do see one for sale, you're bidding against a lot of institutions who have a lot of money. that, like people are now investing in unanchored like strip centers.
Deborah Weinswig (15:03)
Bye!
James Cook (15:21)
And there's more investment in what we call a power center, which is like those big box centers, just all of the retail, the commodity, you the daily needs retail. It's all a good investment right now. People are really perceiving that.
Deborah Weinswig (15:33)
So when you mention Publix, I always think they've traditionally done a great job in pharmacy and focusing on the health of their customers. And that whole drugstore sector has been under pressure. Where do you think we are in the cycle? How do you even describe the cycle that we're in? Because I can't believe how many, well, I mean, we lost the entire writing chain, so that was a lot of boxes.
but then we continue to see the shrinking of Walgreens and CVS and it's not like we're seeing a huge uptick called independence. So what's happening, why is it happening, how does it impact the real estate landscape and what do you think it looks like in a few years?
James Cook (16:14)
Yeah, I mean that's it it felt sort of for me like it kind of came out of nowhere where suddenly, you know drug stores, which I mean there used to be everybody was on every corner, you know every major chain and the economics and I'm not going to pretend to be in drugstore expert, but the economics of prescription drugs have radically changed and a lot of like Walgreens for example tried for years to expand
what people thought of at Walgreens. They tried to get people to go there for food, for groceries. At one point there was sushi in a Walgreens. A lot of these experiments didn't work. Or they sort of worked but not enough to be really profitable. So a lot of these drugstores are too big. They're carrying too much. They're too costly to operate. I think the future for the drugstore is smaller footprints and integrated into places where people are already going.
So like great examples of drugstore, any Walmart target, all of that stuff. From a real estate perspective, a lot of people were, these are called single tenant net leases, where you own a building, a single tenant freestanding building, and then in this case, a drugstore chain would lease it from you for a longterm lease. These were always considered very good investments because drugstores never close, right?
And that's kind of changed now. And so I think it is a bit of a question mark of redefining what it'll be. But I mean, the demand for prescription drugs, mean, especially with new GLP ones, you know, coming out and all of this stuff, they're not going away anytime soon. It's just a different way to get them, I guess. And also, I should say, more people than ever are also just getting their prescriptions mailed to them directly from the
from ⁓ say an online pharmacy or distribution center, and that's certainly cut into drug store business as well.
Deborah Weinswig (17:59)
Yeah, I mean, it's interesting because I'm very much of the belief of food is medicine. And so I do wonder, and I always thought it made a lot of sense that you'd have the clinic, you'd have the pharmacist, right? You have food all in one place, right? The majority of what, and in some cases, right? A lot of the grocers are 24 hours. It's not necessary there's there a pharmacist there 24 hours, but this idea of how could you, wrote this report, oh my gosh, it was one of my favorites. It was a long time ago.
And it was this idea of like the reverse specialty cycle, right? Because we've seen everything go like you slice as thinly as you could slice it. And then like this idea that, okay, we did all that. Now we're going back into right? Like bigger fewer types of retailers if you were. And I just, this actually leads into my next question, which is how I still feel sometimes like I blinked my eyes and it happened.
James Cook (18:42)
Mm-hmm.
Deborah Weinswig (18:51)
How did TJ Maxx just like run away with like the department store concept? I I'm like, and there's so many hat now, like really good ones. I'm like, I've been doing more, more just kind of like for our clients, like just taking videos and like showing them because people don't believe you. And I'm like, there's like that 30,000 square foot TJ Maxx like just dropped into the center of Manhattan. And nobody wanted my magic square gardens. I mean, it's crazy.
James Cook (19:14)
I can tell you, so anecdotally, I totally get it. This is years ago, I remember I had to get a shirt, just a dress shirt. I needed a certain shirt for a company event that had to be a certain color. And so went to a department store. I'm not gonna name the department store, but it was a mainstream department store. And I just grabbed one. was like, this is great. Grab it off the shelf, take it to the register. And she's like, that'll be $75. At the time,
That was like, was younger and that was a lot of money. Even now that's a lot of money for just like a shirt off of a shelf, right? And people need nice to go to work and school and church and all that stuff. where do you, where you gonna go get it? Ross Dress for Less, TJ Maxx. That's it. And I totally get it. Like I understand why everybody's shopping at these places. Cause it's like, you know, it's where they can afford.
Deborah Weinswig (19:58)
Well, it's also, it's interesting. like I've been on this, like I I was big. You know, get on these topics and you can't like let it go because right, we were continuing to see, I think it maybe it was just like the culmination of everything like Macy's and Nordstrom's and the Saxdemons thing was very sad. And then Cole's is like falling down and they can't get back up. And so, and I used to love the department store sector. I mean, you know that James, I mean, it was like literally, cause I'm like, it was like the, right when you were a kid, it was like magic. And, and I'm kind of,
starting to feel like oddly like it's like if this is what with retail I feel from the inside to the outside I'm like I go in there now I'm like and and every location is absolutely like they do an amazing job of localization and I'm talking hey in Manhattan right like a mile or two right you have a very different customer base but truly and and and they're really like department stores like they have kids they have footwear they have health and beauty aids they have home and and it's
James Cook (20:51)
Yeah.
Deborah Weinswig (20:52)
And you, the consumer, I, when I used to more time as an analyst and as a consumer in the department stores, the person in front of you, they would have like nine coupons and a credit card. And so going back to your seventy five dollars, they're probably paying fifteen for And you were the one who was kind of, you know, basically helping them afford that that fifteen dollar shirt. And so
James Cook (21:06)
You're right, you're right.
Deborah Weinswig (21:15)
always felt at TJ Maxx, like I called, like that is where I felt like the chump factor. I felt like a chump, right? Because I didn't have all those coupons and everything. And I'm like, I knew I was overpaying. There was nothing I could really do about it. But like, I feel like I go to TJ Maxx and I'm like, I am so smart, right? Like ⁓ that, that kind of feeling. And I think that I honestly, I feel the same way when I go to Aldi because I'm like, I know, first of like you look on the back of the package, right? There's a lot less.
James Cook (21:29)
Yes. Yes.
Deborah Weinswig (21:42)
I mean, the quality of their food is like much less sodium, much less sugar and what not.
James Cook (21:47)
Right, well there
are all the, it's like all, isn't it all German imports, you know? So I'm sure they have really strict food laws in Germany, right?
Deborah Weinswig (21:56)
Exactly.
mean, it's, it's, but, and, so, and you also know that you're, basically paying the, I mean, that truly is right, like the lowest per serving. And I just think this idea and, then the other thing going back to TJ Maxx is that, we saw a lot of retailers who somehow thought that if they could just solve for returns, it would fix everything.
So instead of solving for it to help the consumer have more size or color information, they just basically almost shut the return window. And TJ Maxx has continued to be very generous in their returns and whatnot, but really encouraging you, make sure you try it on, and because they're selling so many different brands. I feel like there's, in some ways, I mean, there's no happy ending to the department store story, but maybe that's as close as we get.
James Cook (22:24)
Mm-hmm.
Deborah Weinswig (22:43)
If we can then take the next step of that, why did they all fail?
James Cook (22:46)
All the department stores? I mean, it's like, who's it for? It's for a consumer from like the 1960s. You know, that's the problem. you know, we have the department store, you know, before the internet, was like, like the, it was like the shopping museum. It was like where you could go to see everything and it was all on display there. And now my, you know, my phone's got more information. So it's got to switch what it is.
You know, now a department store for me like is, know, every city should have like a great class A department. You know, like, I don't know. Is Macy's Herald Square still cool? When I was younger, that was like the place to go, but I haven't been in a minute. Right.
Deborah Weinswig (23:24)
think it's cool for tourists. mean, I'll walk through it sometimes.
It still has like, it has a really good energy. So I'll leave it at that. I mean, hey, if
James Cook (23:29)
Yeah, something like that.
That's a real destination. know, that's where what a department store can can continue to be in the future. And then also like high touch, like, you know, having personal shoppers, having, you know, variety of designer brands, stuff like that.
Deborah Weinswig (23:45)
Well, it was interesting you say that. So someone I knew had like a special occasion they asked me for help to find a stylist. was very, probably the stylist cost was more than what they were gonna buy. So yeah, so I started to do it they were coming into town. So I'm like looking and I was like, wow, Nordstrom's has, I believe it was for an hour. They'll offer a free stylist and then you fill out this whole thing. I mean, my friend did it. I went with her, fill out this whole thing.
James Cook (23:57)
no.
Deborah Weinswig (24:11)
And we went there and literally the guy met us in this, like, you know, like your sparkling water or whatever. And he had a whole dressing room set up for her. And it was like, I mean, it was such a pleasant, like, I stay outside and like to chat with him and like just ask, but it was such an interesting way for them to like almost democratize, right? This idea of like high touch sales. And.
James Cook (24:34)
Yeah.
Deborah Weinswig (24:35)
I mean, I have to be honest, I don't think either she or myself would had Nordstrom's even in like our top where we would go. so it like catapulted to the top of our list and it was a phenomenal experience. And so I think after that, she and I were both talking, was like, well, maybe, you know, that's like our special occasion place now, right? Because of how great the experience was. And so I think how they've evolved and really waned as well.
But you know, it's interesting. I remember being in Mexico City and spending time at some of the departments for short of a reason and just thinking, and this was probably a decade ago, just thinking how amazing their department store sector was, right? going back to what you said, very And the fact that you had Liverpool acquire Nordstrom, right, which is back in Mexico, that there was like an irony there for me because it's one of the strongest department store sectors I've ever seen. And
I'm like, if anyone can fix it, they probably can.
James Cook (25:29)
Yeah, yeah for sure. And I've not been to Mexico City, but I've definitely watched a lot of videos online. ⁓ Fantastic malls and department stores, I'd love to go.
Deborah Weinswig (25:38)
Have you heard of Sakoshi? It's like an Asian beauty store.
James Cook (25:42)
No, I don't think so.
Deborah Weinswig (25:43)
So one opened up literally like two or three blocks from me and it was more like I, it was almost like a, I kind of put the two words together but I don't even know if they go together, like strawberry matcha. Cause it's like that greenish, I guess it's like a mint chocolate chip green and then kind of like strawberry pink and you walk in and there's all these brands you've never heard of. Now I would like there to be a QR code so I could like educate myself but it is this amazing place of like discovery and I find that.
you almost lose track of time. It's like the retail experience you've always wanted, assuming you have a little bit of downtime. have, just, it was one of those things, you see it and you research it, they have 20 stores between the US and Canada. And I think they're doubling their store base this year. And it's interesting because they're focused on, it's almost democratizing.
more beauty like skincare and whatnot. It's ageless, right? Like I saw a of moms and daughters in there. I actually saw a lot of guys in there too, right? Cause they're focusing on just like healthy skin. like one of the new concepts I've seen that I was interested in. What new concepts have you seen that you were like, yeah, I think this is a thing.
James Cook (26:49)
There's, mean, what you're talking about is part of this big trend around ⁓ Asian and Asian inspired concepts expanding in North America. There's so many, like mini so, Pop Mart, bigger ones like round one, where you live in New York, you've got a lot of people don't know this, the biggest QSR chain in the world is called Mishway Ice Cream and Tea. And they've got more units than McDonald's and they've got a couple of locations in Manhattan.
And the other, big one is Luckin. I would almost call Luckin the, let me think about this, the Aldi of coffee shops. don't know if, if you, because it's all about convenience and value with the added bonus of gamification. So, so you know how you go to Aldi and,
Deborah Weinswig (27:23)
Ooh, I'm gonna like brand, that's good. I'm like taking a ton of notes, I'm like, that is good.
I was, yeah.
James Cook (27:40)
You gotta bag it yourself, you bring in your own bags, you gotta check it out. Luckins the same way, there's no cashier, so you gotta get the app, you gotta order it yourself. Your order goes directly to the coffee machine, so the barista is not making your coffee, they're merely taking it from the coffee machine and like putting a cap on it and putting it out for you. So it's very automated, but it's, there's a pretty good menu comparable to Starbucks, but the prices are a little bit lower, but then there's all these discounts.
Deborah Weinswig (27:53)
Okay.
James Cook (28:07)
So every time you order what kind of discount are you gonna get like when I went it was almost 50 % off of my order I was like, this is awesome. So I will see that's a I don't know how many locations they've got about have like I don't know like seven or eight in Manhattan at this point and they've got more there's more Luckins in mainland China than there are Starbucks
Deborah Weinswig (28:25)
Well, basically Starbucks ended up failing because I don't think they understood what the consumer wanted. And I honestly, this is like my big theme now. I don't think they were really interested. know, it's actually.
James Cook (28:38)
Really, what
is it that the, so I don't know much about like mainland China other than I kind of pull ideas from it when I see new cool things pop up. What is it that the consumer wasn't getting from Starbucks?
Deborah Weinswig (28:50)
think that they started off with it being kind of this, you know, they were building these reserve roasteries and it was this like amazing, And I think so if you see enough of those, say on social media, you first of all expect your Starbucks to be like that. And when it's not, you're already like digging right like a hole for yourself. And then I think that the product line, right in China, right, there's a lot of product innovation. And so,
I think they felt like they got the product right and then they just stopped. So it was like, you know, if you think about different iPhone models or whatever, right, that's kind of more how that consumer is used to, right? There's gonna be something new, there's gonna be something different. There's a reason I need to go in, there's a reason I need to bring my friends in. And once they kind of market, what they thought, they understood the market and the product, then that was kind of it. And I remember spending time with them think they believed their own.
whatever nice word you want to put in there, BS, and just didn't evolve. And I think you bring up something, James. So like when I went to the first lockout that opened in Manhattan, like in the East Village or whatever, I'm there and like basically the customers have no idea what's going on. It was like hilarious. And there's no one who's playing to them. Going back to your point, it's like a very low labor model.
James Cook (29:57)
Where do I order? What do I do? I have to download an app?
Deborah Weinswig (30:06)
And so I'm like, and I mean, of course I'm like videoing it all. I'm like, I'm having the time of my life. And so, right, like I know what I'm doing. And so I literally had like five people like, what did you do? I'm like, okay, you download the app, right? You order. And then I said, the best thing is you get a coupon for the next time. And so, I mean, everyone was like, seriously? And you just saw, right? Like all of sudden, right? Like everyone's like at the counter getting their coffee. when I just, cause you know, we all kind of stood there and drank our coffee.
people were like, that's such a good idea because of course, know, it's like the, I mean, it's like the one time a year you get is like around like Black Friday, but it's like Black Friday every day at Luckin and Johnson. I have to tell you, it's the one thing. So I'm gonna kind of go a bit like sort of transition a bit more into the mall sector because I've, what we also see in China is that the malls are more of a platform. It's the same malls we have, it's the same, you know.
James Cook (30:42)
Right.
Deborah Weinswig (30:59)
owners we have in the US in many cases. And they will, during certain times of the year, right, there's a lot of holidays in China, so you can pick any one of a number of holidays. And at the kind of information desk, you will basically aggregate all of your receipts, and then, you know, digital or paper, and you'll bring them to the desk, and you will get, I mean, actually like amazing stuff. And these are things for the most part you're gonna buy anyways.
you just now from kind of like the either the mall manager or the mall owner, you're getting, I it could be, you know, a piece of jewelry, it could be a scarf, it could be, you know, something to go out to dinner, but there is that gamification element, which I just think in general, we don't see as much of that here in the US.
James Cook (31:43)
Not at all. You know, in my limited experience with malls in China, what blew me away was the amount of food and beverage. was like, they're like, I cannot believe the variety and quantity of restaurants in these malls. It was really blowing my mind.
Deborah Weinswig (32:00)
You were one of the first... When did you write that report on FMB?
James Cook (32:04)
my gosh, maybe nine years ago? Yeah, could have been 10.
Deborah Weinswig (32:07)
I was gonna say 10, so that, but
you were really the first person, I think, to talk about what a huge opportunity that was in US Smalls. What have you seen since then?
James Cook (32:20)
There was kind of leading up to the pandemic. There was a gradual increase in the percentage of square feet at the mall devoted to food and beverage and entertainment too. They were both growing. Pandemic hits. It really reigns that in. I would say it really hasn't grown since then. So kind of we had a lot of malls putting in, know, hey, we're going to put in a food hall. We're going to put in this huge flagship restaurant. It hasn't.
Deborah Weinswig (32:30)
depending.
Thank
James Cook (32:46)
Declined a lot but the trajectory is flattened. So we were at a point now where people were saying hey in another 10 years 50 % of the square footage in a mall was gonna be food and beverage and that has not happened that is really common and reigned in but what you've got now is a real focus on Quality, you know, like, you know, if especially if you're a class a mall, you know, you're not gonna have I don't know. I don't even remember like when I was a kid what restaurants were at mall. It was just all food court
stuff and now you want to have the cool thing you can't get anywhere else. know, I like the din tai fung or the hot new matcha spot or the new bubble tea import from, know, whatever or the new Korean K. Well, now I'm going beyond food, but like Korean skincare, you know, the thing that's like the first in the market to happen, you want that at your class a mall.
Deborah Weinswig (33:38)
do you think healthcare, and I mean like real healthcare, starts to come into play because some of the data we've seen is that if the consumer is going to the mall for a doctor's appointment or something that's not, let's say, driven by your desire to look better but really to feel better and to be healthier, that they tend to keep their appointments like two to one versus going to the actual doctor's office because there's a lot of anxiety.
I had thought we would see, once again, I understand that we have very high occupancy rates at malls, but I had thought we'd see more healthcare. What are your predictions both kind of like enclosed and in other formats and where do you think we are in that cycle?
James Cook (34:16)
So
there's different categories of malls. Basically, it's A, B, and C. So those A malls, they are occupied by the best restaurants, the best luxury retail, all that stuff. So they're not gonna really have a lot of healthcare. There's more of an opportunity for the B and C. In some cases, I think there's a real opportunity to take a quote unquote dead mall and just make it a healthcare campus or redevelop it into something with a strong healthcare.
But yeah, the the configuration of like, and you know, like a Simon mall, right? It just doesn't make sense. A Mesa rich mall, you know, it doesn't make sense to have, you know, large healthcare component because they can get higher rents, you know, from say an Apple Store or Louis Vuitton or Gucci or something like that.
Deborah Weinswig (35:02)
What are you seeing in terms of where we're at with luxury and then also luxury secondhand?
James Cook (35:09)
So luxury is in a bit of a mixed state at the moment. we had, you know, early days of the pandemic, we saw a lot of growth coming out of that. We had a lot of aspirational consumers for luxury. So middle class people shopping luxury, which meant a lot of the brands were opening more locations in more off high street, you know, like again, mall locations, usually class A malls, but not places that would have typically had luxury.
So they expanded too much. Since then, we've got the middle class consumer really feeling pinched. So all of the luxury brands are fully focused on the HNW, the high net worth shopper, which is the person who is just not, doesn't care about price. They just want what they want. That's the great customer. So there's a real focus on that. the luxury brands,
They're not opening many new locations, but you'll see them shifting to, we're gonna move our flagship to this better location that's slightly larger, maybe on Rodeo Drive, Fifth Avenue. So not a lot from a real estate perspective, not as many new openings, but a real focus on private space, special suites for their customers. And yeah, a real focus on high touch experience for those high net worth individuals.
Deborah Weinswig (36:27)
So do you think in other words that there's a greater, or a greater percentage of luxury sales consolidating into fewer customers or fewer households?
James Cook (36:38)
100
% yes, absolutely. Which is good and bad. The bad is your market share growth for you as a brand, it's stealing from another luxury. Like you're no longer, there's no longer growth of the pie of luxury spending. But it means you've got a fewer list of potential customers to really focus your marketing on. they're difficult to get a hold of, but there's just fewer of them.
So that can be helpful from a marketing perspective.
Deborah Weinswig (37:07)
It's really interesting. All right. This is my favorite part of the podcast, which is going into our basically lightning round. So James is able to pass if he doesn't want to answer some of these questions. They are not hard. And number one, thoughts on data centers.
James Cook (37:12)
no.
Okay.
Thoughts on data centers? They require a lot of energy. Most communities do not want them. And I'm not an expert on data centers. I'm gonna, I guess I'm gonna say pass. think, well, here's what I'll say is for all of the computing power we're gonna need in the future, we're gonna have to do it somewhere. So we'll see where that happens.
Deborah Weinswig (37:37)
nobody is.
So then going to two, as a result of data centers, what are you seeing in terms of costs?
James Cook (37:52)
how data centers are impacting what, like real estate costs? Not real, cost of construction. Yeah, mean, cost of construction are just, it's just going up. It's, even without data centers, the Strait of Hormuz, the just tariffs, just inflation, cost of labor. I mean, the cost of construction in my world, retail real estate is,
Deborah Weinswig (37:56)
Mm-hmm. And just cause a cons-
James Cook (38:14)
It's so prohibitively expensive. People aren't really building that many new shopping centers, that many new stores. That's why our vacancy is like 4.4%, which is super low because people can't afford to really build new stuff.
Deborah Weinswig (38:28)
So what does that mean? So question three, what does that mean for the holidays?
if there's such a low season right now and we're not even close to Christmas.
James Cook (38:31)
⁓
Yes, so from a consumer standpoint, a kind of status quo, from a retailer standpoint, it just means it's difficult to open new stores. And when you see these announcements where a chain will close, like for example, a few years ago, had like Party City, know, Bed Bath and Beyond, that's like good news, because there's other retailers who want to expand and now that space for them to go into.
Deborah Weinswig (38:57)
All right, number four, of course we can't like get out of here without talking about AI, although we've managed almost the full hour without it. But how does AI impact retail real estate?
James Cook (39:03)
⁓
The short answer is I don't know. I will tell you I'm about to go to ICSC in two weeks and I'm doing a lot of podcast episodes and panels on how AI impacts property, PropTech, all of that. I've seen a lot of great pilots. I haven't seen any AI tool that's impacted the bottom line from the real estate perspective.
I've seen people say, well, we had a gain in efficiency, but I was like, okay, but you know, did you make more money? Did you save money? And that's a big question mark. And from the consumer standpoint, Deb, know that you think that people are going to use agents to shop for them and maybe it'll happen, but I haven't seen one and I mess around with a lot of stuff. I haven't seen one that's, that's ready for prime time yet. I'm telling you, I tried to have an agent schedule an appointment for me the other week.
Deborah Weinswig (39:52)
No.
James Cook (39:57)
and put a bunch of crazy calendar items on my Outlook with a bunch of randos. So I don't trust that agent either.
Deborah Weinswig (40:05)
I think whatever
you've named that agent, let's say that that's Sally, Sally needs to be retired and we need to roll out Sammy, right? Well, I gotta tell you, as I digress, but sometimes I'll be talking to people and they're talking about all these people I've never heard of. like, I haven't heard you talk about that person before. They're like, that's one of my agents. I'm like, okay. So now they're kind of like, that's where I start to feel a little, I guess almost black mirror-ish when they're coming into the folds of like.
James Cook (40:09)
Yeah.
You
Deborah Weinswig (40:31)
You're talking about your family members and then you're like dropping in some of your agents. So yes. All right.
James Cook (40:34)
Right, it's like
Alexa was the first one and Siri, now there's so many.
Deborah Weinswig (40:37)
Yeah,
exactly. All right. Number five. Where do you think we are? know ICSC is very excited about PropTech. Where do you think we are in terms of PropTech and what do you think drives that sector?
James Cook (40:50)
We're in a pretty great moment from a landlord owner perspective. There are so many cool startups out there right now, experimenting with all kinds of just every sector of real estate development management from the retail side of things like site selection, all of that. There's a million cool tools out there. Everybody wants to give me a demo, by the way. If I wanted to, my full-time job could be demoing software.
But my point is that most of those will fail. The ones that survive are the really cool ones. And I think a lot of them will improve our industry for the better, for sure.
Deborah Weinswig (41:27)
All right, number six, based on that, what do you think is the greatest opportunity or problem for them to solve right now?
James Cook (41:33)
my gosh.
So from my world, like retail real estate, there's site selection where you're gonna go. And that's a great challenge. To this day, despite all the predictive tools we have, it's still a mixture of art and science. still, we'll create these awesome predictive models, but then somebody's still gotta go on the ground and look around it. Because real estate is physical,
that is the biggest challenge. It is something computer experience the way a human can. And there's all this information that I have in my head that's really difficult to model, even with the most advanced AI we've got. So I would say the biggest challenge is the fact that it is physical and that we know people who work for.
for retailers when they're doing site selection, they send experts on the ground to walk the whole site and there's stuff that only they can do. So I think it'd be a challenge for any electric tool to do that.
Deborah Weinswig (42:33)
It was, interesting you brought that up because I know a retailer who's experimenting with, they've put like sensors in the stores so that they can start to get a sense like if the consumer is anxious or if they're happy or if they're feeling joy. And I was like, and I'm like, what, what, like for what purpose? they're like, we're trying to understand if we need to change, like, cause if they like tweak the lighting or if they play different music or whatnot.
James Cook (42:47)
Really?
And what are you gonna do with that?
Deborah Weinswig (43:01)
And I'm like, that's an interesting thing. I'm like, I just don't, and they can like sense your heartbeat. And I'm like, you know, I just want you to let me, well, there's like a Whole Foods in New York and it says like, we capture biometric data. I'm like, yeah, that's a Whole Foods I'm not going into. So I'm like, I was like, I said, just as long as you let the customer know. And then first it was like, what do mean let the customer know? I'm like, cause you're biometric data, right? I'm like, you need to like make sure that they're aware that you are, you know, and they were like, oh, we hadn't thought about that. So.
James Cook (43:25)
Or you could take that money and instead pay for more store associates to be on the floor and they'll see if you're not happy. I don't need a computer to know if you're unhappy.
Deborah Weinswig (43:35)
I think two of the things we've talked about between gamification and store associates delivering, you know, even if it's just okay service, right? That's, think those are the two and yes, everything in retail is hard, but those are the two things I think right now you get the highest ROI on.
Okay, number seven, the most overused phrase in retail real estate right now.
James Cook (43:56)
I hate to say it, but it's probably experience and experiential. And the reason why it's overused is there's no other synonym that captures it. And I write like, I'm a big fan of, like I said, place making and creating unique experiences that get people out of their houses. And so I write about it all the time and I'm always pulling up this thesaurus. Like, what can I use? It's another word beyond experience and experiential, and I haven't found it. So yeah, that's it.
Deborah Weinswig (44:24)
Okay, number eight, biggest misconception the media has about commercial real estate.
James Cook (44:29)
For retail real estate, it's that retail is dead. Like people think it like to this day, I, you know, I'll, I'll be at some family gathering and they'll be like, yeah, you work for like shopping centers, right? Isn't everybody just shopping online? I feel like I'm like a walking, talking at like, like industry advocate. I'm like, actually, only less than 20 % of shopping occurs online. by the, or while it's actually more than that now, but anyway, less than 30 % of shopping occurs online. The vast majority is in store.
Deborah Weinswig (44:55)
Yeah, it is interesting kind of what people, well, I think that that diatribe around like, you know, the mall is dead was like, we wrote a whole series, actually it was the best performance of some of the research we ever had, was like, the mall is not dead. And I love it, I was like, I think we should rebirth that because it was just like, you have all these preconceived notions and most of them are wrong. So anytime you read through that, you're like, yeah, you know,
I thought that, I'm not sure where I kind of picked that up, but I was like, let's just debunk all the myths, because you saw the data, right? You've seen year on year increases, and I don't think it's slowing down anytime soon. right, number nine, what city you'd bet on for the next decade?
James Cook (45:40)
What city would I bet on for the next decade?
Boy, I love Chicago. think, you know, there's certain cities that are safe bets. New York, very safe bet. But, you know, Chicago, feel like it gets, it's weird, because for me, it's the big city. I live in the Midwest, and that's the big city. But I think it often gets overlooked in terms of cities that are just overall
Deborah Weinswig (45:44)
Bye.
James Cook (46:01)
bigger on the map like New York and LA or have more growth potential like say Nashville, know, or Austin or something like that. But yeah, no, think and you know, the big story right now in Chicago is Michigan Avenue. People really had written that off as, that was hot in the 90s, but it's real resurgence. Every week there's new cool announcements of new flagships. Again, here's your word, experiential flagships.
on Michigan Avenue, everything from like the Harry Potter store to a new Uniqlo to there's a new competitive socializing concept out of the UK. It's called a urban playground that's come into Michigan Avenue. So all kinds of cool stuff going on.
Deborah Weinswig (46:39)
It's funny, I was just there for an event and someone was explaining to somebody else what Water Tower Place was and I'm like, wow. I'm like, that used to be, I mean, that was you in there, you know, that was just such a special, right? Like going back, but they had two anchors, right? Two anchors are both department stores. That was, yeah, no. All right, Kate, and we will finish it off number 10. Pop-ups and short-term leases.
James Cook (46:47)
That's a story.
Deborah Weinswig (47:06)
gimmicks or the future of leasing.
James Cook (47:08)
I think it is the future of testing. It is the future of testing. So from a landlord perspective, you're not making any money on those. You might hold off a little bit of space as like pop-up space because you want to keep it interesting. You want different stuff to cycle through. I know a lot of the landlords in like class A malls and lifestyle centers will have one like vanilla space that they'll use for pop-ups.
Deborah Weinswig (47:12)
You are.
James Cook (47:32)
But from a brand perspective, especially if you go to a digital native brand, there's no better way to quickly experiment with different concepts and ideas and meet the public where they are than doing pop-ups. So I'm a big fan. I think they're definitely here to stay.
Deborah Weinswig (47:47)
I enjoy this conversation, I had three things I didn't know before. Luckin as the Aldi of coffee, the future of testing as pop-ups, and at these dead malls, there's an opportunity for them to be healthcare campuses. So James, always a pleasure, thank you so much, and I will see you like, a week and a half at ICSC, I can't wait. Thanks, bye bye.
James Cook (47:51)
Okay.
Alright, I'll see you there.
Philip Moore (48:08)
Thanks, Deborah. And thank you for joining us this week. CoreSight Research serves the retail community with timely research on consumer shopping behavior, trends across every retail vertical, financial outlooks for industry leaders, and the latest breakthroughs in retail technology. We also develop and maintain proprietary data resources, conduct technology assessments, provide strategic consulting, facilitate leadership communities,
conduct seminars and conferences. Visit us at corsite.com to learn more about all the ways we can support your success. Have a wonderful week.