How much is an Apple store worth?
It turns out, a whole lot.
Although sales from the tech giant’s 400-plus retail stores only contributed a fraction of its $183 billion in revenue last year, its locations can raise sales at the malls where these stores are located by 10 percent, according to The Wall Street Journal.
Citing data from Green Street Advisors, the publication reported Tuesday that the draw of Apple stores not only allows the iPhone maker to negotiate low-rent deals for itself, but drives rents higher for neighboring stores. Whereas a typical mall tenant can pay rent up to 15 percent of its sales per square foot, Apple pays 2 percent of this metric, tops, industry executives told the paper.
Apple declined to comment on rent to the Journal, though spokesman Nick Leahy did say that its stores draw about 1 million shoppers each day.
The popularity of Apple stores underscores a growing trend in the retail industry, where the large department stores—or “anchor” tenants—are no longer the catalysts they once were.
Although these megastores used to bear the primary burden of pulling consumers into the mall—giving them lower rent costs, to boot—industry experts have noted that as consumers do more research ahead of their shopping trips, they’re less likely to influence someone’s decision over where to shop.
For example, if a shopper finds the perfect blouse while shopping online at a specialty store such as Express, they will visit a mall that has an Express—regardless of what the mall’s anchor tenants are. In this way, smaller shops can serve as the anchor for a specific shopper.
“The idea, the concept of the anchor is changing completely,” Jesse Tron, spokesman for the International Council of Shopping Centers, told CNBC in an interview last week. “Every mall has a website and you as a consumer know the brands that you follow and that you like and so you go to a specific mall probably for a specific brand.”
And while shoppers don’t tend to linger at the mall like they used to, according to Tron, there is still an opportunity when customers are making that trip for a specific item, to lure them in and get them to make an unexpected purchase.
That’s one reason why the idea of an anchor stores is shifting, and now includes nontraditional concepts such as grocery stores or gyms, which can repeatedly draw shoppers to the mall.