Shopping centres located in a business centre not adversely affected by the credit crunch
Aims
The global market is facing financial crisis and different business are being affected from retailing, banking and finance and also even Multinational Corporations. The root of this financial crisis is the emergence of credit crunch. Credit crunch emerge because of the credit bubble and also the under pricing of risk at period when faster financial changes outpaced regulatory controls and made risk assessment harder. Credit crunch background can be attributed to the recovery from 2001’s economic slump when the international profit development h has soared. In various nations, the origin of credit crunches translated into harshly higher real estate prices and also the unfamiliar sharp returns in equity markets.
The sub-prime mortgage market crash in the United States affected the banking sector in the United Kingdom, particularly the banks that engaged intensively or almost exclusively on the sub-prime market. The crash in the United States signalled the problem that is also starting to heighten in the United Kingdom because of a number of reasons. One, large banks present in the United States and involved in the mortgage market will be in the process of consolidating their losses so that these banks refused or had not ability to extend short term loans to other banks and industries, which heavily relied on short-term loans from various banks for its sub-prime mortgage system to work. Another, banks in the United Kingdom also refused to extend further loans to the mortgage market or to financial institutions relying on short-term loans. This led to a credit crunch that eventually led to huge losses and bankruptcy of various industries (Smith & Waples 2007; Gross 2008; International Herald Tribune 2008).
Credit crunches has become an ongoing economic issue that shows itself through the liquidity problems in the banking system which owes to foreclosures. Such economic issue began with the bursting of the United States housing bubble or the so-called credit bubble (Moyer, 2008; Lahart, 2008 and the intensive default rates in terms of the sub-prime and other adjustable rate mortgages which established higher-risk borrowers with lower revenue and lesser credit history than other prime borrowers. It has been noted that the causes of the credit crunches can be attributed as varied and complex. With this economic turmoil due to the credit crunches, the economic losses damaged balance sheets of various economic establishments, as assets will be marked down but liabilities remain unchanged. Aside from this, the credit crunch also reduced and lessens the willingness to lend between industries.
In spite of the existence of credit crunch, leading to financial crisis and losses of various companies, there are still industries that are not affected by this issue; such industries include the Shopping centres, like Wal-Mart, Kmart, Target and other shopping centres. Primarily, the main goal of this proposed research is to investigate whether shopping centres development situation in business are still doing well despite of the credit crunch.
Hypothesis
This proposed research will work on the following hypothesis:
“Shopping centres located in a business districts not adversely affected by the credit crunch”.
Research Objectives
The aims of this work are to investigate if the hypothesis is true or false. Shopping centres development situated in business district are still doing well despite of the credit crunch. They have high level of supply and demand and low vacancy rates, because they are well located. The aim is to investigate if the mentioned above is true. Moreover the aims are to investigate how other shopping centres affected by the credit crunch in Europe and what they think about the location. Specifically, this proposed research attempts to attain the following objectives:
1. Identify other factors that contribute to the success of the shopping centres despite the existence of financial crisis or credit crunch in the market.
2. Compare shopping centres in business district in England and Europe and found out if the location helps with their success in the credit crunch.
3. Analyse the effect of the credit crunch in the current position of the shopping centre and determine how these industries are able to succeed in spite of negative impacts.
4. Investigate the hypothesis and identify if there is a significant relationship between the strategic location of shopping centres and success of the shopping centre.
Research Questions
This proposed research aims to provide answers to the following queries:
1. What are the factors that contribute to the success of the shopping centres despite the existence of financial crisis or credit crunch in the market?
2. What are the differences and similarities of successful shopping centres in business district in England and Europe and found out if the location helps with their success in the credit crunch?
3. Is there a significant relationship between the strategic location of shopping centres and success of the company?
Context
History of Shopping Centres
While market-places are familiar to all, the shopping centres, especially as it is known in North America and more recently in Europe, is typically based on a galleria or arcade of boutiques and shops on one or more levels between two major stores which ‘anchor’ the dumb-bell-shaped plan by providing the functional poles of attraction for shoppers. A large food store at one end attracts shoppers from a large department store at the other end, or vice versa. The process ensures a steady flow of shoppers or even strollers, window shoppers and ‘hangers-out’, elderly people savouring the lively crowd, or adolescent ‘mall-rats’ and ‘mall-bunnies’ as one journalist called them (Howard, 1985).
Shopping centres are typically more grandiose than stores which, in their smaller ‘community’ versions, may be simple strips of small stores fronted by parking. In the malls, the plan becomes more complex (triangular, figure of eight), everything is larger, the architecture more monumental (expensive finishes such as marble, skylit arcades, soaring ceiling heights, dizzying mezzanines, sculpture, indoor tropical gardens), the major ‘anchor stores’ multiply and the functions increase with the addition of cinemas, hotels, zoos, recreation complexes featuring pools, ice-rinks, stadia, fairground rides and so on, office towers, conference centres, libraries, churches-in short almost any urban activity one can imagine. Shopping centres now form the architectural typology for office buildings whose elevator lobbies grew first into atria then into malls (Shields, 1992). More insidiously, their ‘social logic’ of retail capital mixed with the social ferment of crowds of people from different backgrounds and all strata forms the model for conceptions of community and the public sphere which later emerge, concretized, in public projects such as museums.
The building itself is completed by the provision of parking for several tens of thousands of cars. In suburban locations, or areas where land was available when the mall was built, parking forms a great asphalt girdle completely encircling it. Such malls often lie at the intersection of major ‘feeder’ roads. The mall and intersection are typically ringed by apartment towers and schools sited nearby according to modernist theories of urban zoning. In this configuration (a new and little-remarked upon urban morphology), the mall forms the centre of an urban constellation and a social community is born which appropriates the mall as a surrogate town square.
As major users of such malls, the elderly walk from the nearby apartments and the adolescent ‘mall jammers’ migrate from schools in the vicinity to match wits with security personnel, in search of less controlled areas than the schoolyard. Others arrive by car or on buses which, symbiotically exploiting the conjunction of parking space and enclosed waiting areas patrolled by the mall owners’ security guards, serve the malls as nodes in the public transport system. Ease of access, controlled climate, and reduced price based on a higher market volume are the functional attractions of the mall (Shields, 1992).
Definition
Contemporary definition of shopping centre is considered as a place where people can enjoy, relax, be entertained and can buy the products and service they need in one place. According to Klaffke (2004) today’s shopping centres are not just about shopping, but about individuality and entertainment. It is suggested that shopping centre or mall is not merely a place for commodities exchange and leisure; it could be a place for buying images and promoting lifestyles.
In their totality, post-modern shopping centres are characterized by a new spatial form which is a synthesis of leisure and consumption activities previously held apart by being located in different sites, performed at different times or accomplished by different people. Modernism in this and many other ways is marked by what Max Weber described as the segmentation of culture and the separation of life into separate value spheres: culture differentiated from economy; both separated from religion. Most notably in the shopping centres, a new spatial and cultural form (Chaney, 1991) results from a combination of two sets of spatial practices and understandings; practices which characterize the spatial performance typical of leisure spaces and spatial practices which characterize the performance of commercial sites. There are different types of shopping malls which include territorial, district, local/neighbourhood and thematic shopping centres.
Here shopping centres becomes a lifestyle experience as well as a sensory experience where the consumer can touch, see, smell, taste and enjoy the goods but also imagine owning them. Increasingly, consumers today want more than just the product they come to buy; they want it to come with an experience or wrapped in illusion (De Chatel & Hunt, 2003). People enjoy experiential shopping because it feeds their imagination.
Factors Affecting Shopping Centres
The shopping centres occupy a position of prominence in European and British Market economy in observation of its massive potential in terms of attracting more and more shoppers. The shopping malls have gained drive in terms of its market share primarily due to the overwhelming support of their target market and the ability of the investors to consider various factors such us location, layout, design and size..
Using these factors, it can be concluded that the customers perceived shopping malls nowadays as a place in which they can relax, enjoy and be entertained and a place in which everything they needed (commodities, goods, and services) can be found at a low and practical price. Different studies have shown that shopping centres re also influenced by different factors in terms of its market position.
Accordingly, contemporary shopping centres has more essential role (Sugarda, 1996). Shopping centre is not only a place where one can buy or purchase goods but also a recreation place. Hence, most shopping centres also give amusement store, children playground, theatres cinemas, ice skating, as well as other game centre. In addition, the development of the transportation and road system has also offered more choice for clients to go shopping centre outside their neighbourhood (Santoso, 1995). In addition, toll way has impacted consumers not to consider the distance but only travel time. In a study conducted by Tanan (1998), it emphasised the value of travel time than distance from home or workplace to shopping centre. Investors nowadays, consider travel time which include the access road, traffic, as well as available transportation mode. IN this regard, investors and shopping centre developer has built big shopping centre not only in the city centre but also in suburban regions. Shopping centre investors has to realize the main factors which are considered by the clients or consumers. The major aspects are strategic location, travel time from home or work place to the shopping centre as well as the size of the shopping centre size. In a study by Carn (et al. 1988), it has been stated that the basic assumption of shopping centre size have significant relations with the variety of goods and service offers. In addition, the bigger the size of the shopping centre, the more customers will be attracted to shop. In this regard, the balance between size and the variety of the products in the shopping centre will provide more comfortable shopping centre. Aside from travel time, size and location, there are some other factors which influenced that success of a shopping centre and these include the variation of goods, designs and layouts and convenient place.
According to Tanan (1998), stated five essential factors as attraction power of shopping centre or shopping malls and these include location, business concept, layout or design, tenant mix, and the business management. Accordingly, strategic location have a very wide meaning which includes catchment area, on the way home, location accessibility, and neighbourhood development. Strategic Location has closed and significant relationship with the accessibility of shopping centre. The vital success of shopping centre or shopping malls is location (Syahara and Ristiana, 1992). According to Carn et.al (1988) general location of shopping centre or shopping malls is either in the city centre or in suburban in housing complex. The travel time or the distance will be depended on road situation as well as and transport mode availability.
Methodology
The study is exploratory, being descriptive and illustrative. To achieve the objective of this study, the researcher opts to use descriptive method of dissertation. The purpose of employing the descriptive method is to describe the nature of a condition, as it takes place during the time of the study and to explore the cause or causes of a particular condition. The researcher opts to use this kind of dissertation considering the desire to acquire first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.
According to Creswell (1994), the descriptive method of dissertation is to collect information or data regarding the present existing situation or phenomenon. Descriptive dissertation has as its purpose developing a better understanding of a phenomenon in detail. Descriptive studies usually have as their purpose the first two aims of normal science as described by Kuhn (1970, pp. 25-26): “attempts to increase the accuracy and scope with which facts are known” or “determination of those facts that can be compared directly with the predictions from theory”. The aim of descriptive dissertation is to clarify the nature of a phenomenon in a specified, static context while viewed from a specific, fixed perspective.
Descriptive dissertation design, then, is directed toward clarifying a phenomenon’s appearance or nature. In other words, it describes a particular phenomenon, focusing upon the issue of what is happening, rather than why it is happening.
Two types of data will be used: the primary and the secondary data. The primary data will be derived from the answers respondents gave in the self-administered questionnaire prepared by the researcher. In addition, the information obtained from the interview also provided primary dissertation data that supported the study. Primary research will be obtained through semi-structured interviews, questionnaire to gather primary information about the two shopping centres through interview and photos. The shopping centres that will be considered Canary Wharf`s retail in London and Golden Terraces shopping centre in Warsawa, Poland. Moreover secondary research will be carried out from books, articles, journals and other reliable resources.
The secondary data on the other hand, will be derived from the findings stated in published documents and literatures related to the dissertation problem. These will be based from the recent literatures related to financial crisis, shopping centre and strategic location and the concepts cited by the respondents.
In terms of approach, the study employed both qualitative and quantitative approaches. The quantitative approach focused on obtaining numerical findings was used with the survey method. The interview on the other hand, made up the qualitative approach of the study as this focused on personal accounts, observations, description and individual insights of the respondents. This study employed the combined approach so as to overcome the limitations of both approaches. In order to achieve the goal of this paper, the researcher has been able to use appropriate approach. For this study, the research design used is qualitative approach (Mays & Pope, 2000). In this study, the qualitative data used provides details descriptions of the entire topic which is the health incentives which allowed the researcher to gain better understanding of the objective of the study (Creswell, 1994). It can be said that the article used qualitative research method since it will try to find and build theories that will explain how strategic locations affects the competitive edge of shopping centres.
In this research design, the data collection approach includes the consideration of relevant literatures that provides discussion about the practical considerations for employers which want to use strategically incentives as a vital program approach for motivating their employees and engaging them to health promotions.
Herein, the researcher has been able to gather information from relevant studies and incorporate it qualitatively through the use of content analysis. Through the secondary documents, it can be said that the researcher have been able to achieve the goal and objective of this study. It is said that the qualitative research utilised in this article can be said to be as it is more open to adjustment and refinement of research ideas as an inquiry proceeds.
Several researchers had stated that generally, qualitative research takes place within a natural setting. It is less likely for qualitative research to impose restriction on data collection. Furthermore, it is more focused on idiographic descriptions and emergent themes rather than on categorical frameworks and very specific hypothesis (Cassell & Symon, 1994).
This study may be useful in gaining insights on the future of the shopping centre based on the financial and economic crises encountered. This paper aims on identifying whether shopping centres that are located in strategic locations are adversely affected by the financial crisis.
This study will be significant in management/business firms, particularly for the shopping centres in a sense that it will broaden their knowledge about marketing techniques and will help them weigh if the current techniques are appropriate in the financial crisis faced in the global market. Furthermore, it will contribute to business research. This can be used as a future reference for future research that will focus choosing the best location to make the shopping centre survive in the market competition.
Moreover, this study provides significant role to the society since it depicts the future of a certain business with regards to marketing techniques and business models. In addition, this study might become of great use to different businesses since marketing style has negative and positive effects to different businesses or even to consumers. Moreover, research materials are useful in persuading people to adopt something new like the business mode to be followed by Shopping centre’s.
As stated before, this study provides significant role to the society since it depicts the future of a certain business with regards to shopping centres or shopping centres. Furthermore, this study provides qualitative analysis and quantitative analysis for the findings. Additionally, every data was addressed through interpretation and in-depth evaluation. Furthermore, the number of respondents is limited to 100 individuals (investors). As the research will be completed in a relatively short period of time other factors and variables are not considered. This might have an impact on the results of the study.
3.2 Participants
The respondents of this research will be investors, to get pertinent data on their perception on the success of the shopping centre because of their strategic locations. These participants will be selected through random sampling. This sampling method is conducted where each member of a population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming a dissertation participant, this is said to be the most efficient sampling procedure.
In order to conduct this sampling strategy, the researcher defined the population first, listed down all the members of the population, and then selected members to make the sample. For this purpose, a self-administered survey questionnaire in Likert format was given to the respondents to answer. The respondents assessed whether shopping centre locations helps in combating financial crisis because of credit crunch. However, due to time and budget constraints, the researcher opted for a smaller sample size. In this regard, the dissertation will only consider 100 employees of the company. Investors have been chosen to ensure that the data and information that will be gathered is pertinent.
For this study, two dissertation instruments will be used to evaluate the relationship of the two contexts. These dissertation instruments included the survey questionnaire methods. A self-administered questionnaire was distributed to the selected s. The questionnaire given to the respondents aimed to assess the factors that contribute to the success of shopping centres in spite of financial crisis. This focus of the assessment was based on the principles introduced by various authors.
The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents will be given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item. Below are the designated quantifications used in the questionnaire for this dissertation?
1
Strongly Agree
2
Agree
3
Uncertain
4
Disagree
5
Strongly Disagree
The survey method will be facilitated through the use of survey forms and questionnaires. This will include inquiries on the general characteristics, particularly the socio-demographic information of the selected research participants. Quantifiable inquiries will be likewise contained in the survey forms and questionnaire regarding the topic. The survey format will be distributed to investors of shopping centres in district of England and Europe. The criteria which will be used to select the employees will be the individuals that have long been in the company for more than 3 years.
Chapter structure
For this proposed research, the dissertation will be in five-fold. The first part will tackle about the background of the study, aims and objectives, research questions and significance and scope and limitations.
The second part provides the discussion of the relevant literature from previous documents and research.
The third part will adhere to the discussion of the research methodology and the fourth part provides the presentation and analysis of the data collected from the respondents.
The last chapter will provide the summary, conclusion and recommendation based on the objectives of the study.
TIMETABLE
TASK
Month
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
Select topic
Undertake preliminary literature search
Define research questions
Write-up aims and objectives
Select appropriate methodology and locate sources of information. Confirm access.
Write-up Dissertation Plan
Undertake and write-up draft critical literature review.
Secondary and Primary Data Detailed
Sources
Consulted
Research Findings:
Analysed
Evaluated
Written-up
Discussion:
Research findings evaluated and discussed in relation to the literature review
Methodology written-up
(including limitations and constraints)
Main body of the report written-up and checked for logical structure
Conclusions drawn
Recommendations made
Introduction and Executive Summary written-up
Final format and indexing
Reference
Carn, N., Rabianski, J., Racster, R., Seldin, M., 1988, Real Estate Market Analysis Technique and Applications, Prentice Hall, New Jersey
Chaney, D. (1991) ‘Subtopia in Gateshead: the MetroCentre as a cultural form; Theory, Culture & Society 7:49-68.
Creswell, J.W. (1994) Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage.
Gross, D (2008). The Mark-to-Market Melee: Did an obscure accounting rule cause the credit crunch?. Viewed 26 June 2008, http://www.newsweek.com/id/130029.
Howard, G. Jr. “The Evolution of the Planned Shopping Centre in Suburb and City.” Journal of the American Planning Association 51(1985): 449–460.
International Herald Tribune (2008). Crisis deepens for Northern Rock. Viewed 26 June 2008, http://www.iht.com/articles/2007/09/17/asia/17northern.php.
Klaffke, P. (2003) “A spree: A Culture History of Shopping”, Arsenal Pulp Press.
Lahart, J. Egg Cracks Differ In Housing, Finance Shells. Online available http://online.wsj.com/article/SB119845906460548071.html?mod=googlenews_wsj. Retrieve December 13, 2008, 2
Mays, N. and Pope, C. (2000) Qualitative research in health care: Assessing quality in qualitative research. BMJ, 320, pp.50-52
Moyers, B. Online available http://www.pbs.org/moyers/journal/06292007/transcript5.html. Retrieve April 15,
Santoso, Suwito, 1995, “Membaca Trend Pusat Perbelanjaan”, Properti Indonesia,
Desember, pp 104-105
Saunders, M., Lewis, P. and Thornhill, A. (2003). Research Methods for Business Students, 3rd Ed. Prentice Hall Financial Times: London, pp 205.
Shields, R.J. (1992). “Lifestyle Shopping: The Subject of Consumption”. London Routledge.
Smith, D & Waples, J (2007). Worst crisis for 20 years, say banks. Times Online. Viewed 26 June 2008, http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2412740.ece
Syahara, H., Ristiana, V., 1992, “Kiat Sukses Shopping Center Lokasi, Lokasi, dan
Lokasi, Info Papan, April, pp 13-15
Sugarda, Yanti B., 1996, “Antara Rasional dan Emosional”, Properti Indonesia, April,
p 57.
Tanan, A., 1998, “Manajemen Pusat Perbelanjaan (Shopping centre or shopping malls Management)”,
guest lecture note, Postgraduate Program, Petra Christian University, Surabaya,
June
Credit:ivythesis.typepad.com
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