As the number of people moving to new suburban areas with long commutes to major retail hubs rises, mini-malls are soon becoming an important new retail sector segment in Santiago. An estimated 26,000 square meters of mini-mall retail space became available last year, according to an article in Chile's Diario Financiero.
The continuing economic expansion in Chile, near-full employment, low inflation, and the availability of commercial credit have all increased retail demand dramatically. The Retail Sales Index of the Chilean Central Bank increased by 60% from 127.35 in January 2012 to 204.60 in December 2012. From 107.15 to 155.69 in December 2012, the Central Bank of Chile's Supermarket Sales Index increased by 45 percent. directory
Access to credit by consumers has had a significant impact on retail expenditure as well. Credit cards totaled over 1.3 trillion pesos in transactions in the third quarter of 2012, according to figures from Chile's Ministry of Finance. With gross transactions of roughly 199 billion pesos, this is a significant improvement above the 5,460,609 credit cards released in the third quarter of 2011.
Although this is the case, retail saturation has increased, particularly in the larger forms. Chile came in second place in the A.T. Kearney Retail Global Retail Development Index, although it only received a score of 17.4 for market saturation, indicating that it is oversaturated in the retail sector there.. Due to increasing levels of saturation, many big retailers have expanded fast outside of Chile.
There are other reasons to investing in mini-malls, aside from urban sprawl and the desire of many Santiago residents to cut shopping travel times in a city where car ownership is fast increasing and congested on the highways. As an example, there is a great deal of dilapidated shop space in Santiago and elsewhere in Latin America. More harder to obtain and convert into new store space are larger plots available for larger malls. Banks and pharmacies, two stalwarts of the Chilean retail sector, tend to anchor Chile's mini-malls, making them more resilient to the country's economic downturns. In an environment where building prices are constantly growing and protracted development timeframes can erode investor profits, mini-malls can be built much faster and for a lot less money than conventional shopping malls.
According to demographic trends, the need for smaller retailer models will continue to be driven by convenience. Early census figures show a 61% increase in Quilicura's population between 2002 and 2012, which is located on the northern edge of Santiago. Between 2002 and 2012, Lo Barnechea's population expanded by 33.3% on the outskirts of Santiago. Because of the increasing population density in these places, mini-mall prospects abound.