While much of the focus of the arrival in Australia is of giant online US retailer Amazon and its negative impact on Australian retailers, not much has been said about the retailers' landlords.
And the equation seems quite simple. If bricks and mortar retailers in shopping malls are forced out of business, the mall owners will suffer – perhaps even more so.
It's not hard to imagine a scenario where one or two retailers shut up shop in a mall. That leads to a small drop in passer-by traffic which then negatively affects other retailers, leading to an endless spiral until there are virtually no retailers left in the shopping mall.
That would obviously spell disaster for the mall owners.
In some parts of the US, the above scenario is already playing out.
So which shopping mall owners are at threat?
Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP), which owns around 80 regional retail shopping centres around Australia and New Zealand, Scentre Group (ASX: SCG) which owns and operates 39 Westfield-branded shopping malls in the region, Vicinity Centres Re Ltd (ASX: VCX), and Charter Hall Retail REIT (ASX: CQR), although they are by no means the only ones.
What can the landlords do to stave off the threat?
Well, it's no secret that Australians love to shop, so making a visit to the shopping mall an experience rather than just a shopping trip will help. That could include things like special promotions, dining, entertainment, and other activities to entice consumers into the shopping mall.
The landlords do have some advantages they can use against the online retailers – otherwise we'd have no malls left already.
Foolish takeaway
They may not be on the front line against Amazon, but there seems no doubt the shopping mall owners are going to face their own fire when Amazon arrives.
