Pop-Up Halloween Stores Don’t Scare Landlords

Halloween specialty stores have been popping up annually since the 1980’s and quickly became a national phenomena.  According to the National Retail Federation, the celebration of Halloween is projected to generate approximately $7.4 billion dollars this year. Pop-up Halloween stores can be big business for both retailers and their landlords.  Even though pop-up tenants only typically occupy their spaces for a maximum of ninety days, landlords are able to charge higher rents for those periods than one would typically find on a longer lease.  Many pop-up Halloween stores begin scouting for next year’s lease as early as November 1 because the retailer can capitalize on return business if they “pop-up” in the same location again.  Although many short-term leases signed in the first six months of the year include clauses allowing the landlord to break the lease if it finds a suitable long-term tenant, by June many landlords are happy to fill the storefronts on a temporary basis and attract additional traffic to the center.

Temporary Halloween stores often have specific basic criteria for potential locations: roadside visibility, foot traffic and proximity to other in-demand stores.  But while pop-up retailers may be unwilling to compromise on these criteria, they are often flexible on other criteria.  They have been known to rent old warehouses, bookstores, restaurants, and even space in parking lots if they are in the right location.  Some of these unique spaces actually help pop-ups create the “Halloween experience” their customers are looking for.  In order to create the right ambiance, specialty stores are hiring more than just cashiers and stockers.  Many are bringing in lighting technicians, makeup artists and even prosthetic engineers.

Although Halloween specialty stores initiated the pop-up trend and dominated the market in the 1980’s and 1990’s, more general retailers have begun to open their own temporary stores. Clothing lines, restaurants, electronic stores, and even major online brands are getting on board with pop-up stores.  Some use it as a way to test a market for permanent locations.  If a location sells enough of a product to a certain demographic, that is a strong indicator to the retailer that a permanent store location would succeed there. Others use the pop-up model to launch a new brand.  Retailers can also increase brand recognition by orchestrating temporary stores in many locations to reach a broader audience than with a single permanent location. Then, when it comes time to open permanent locations, for those locations where the retailer had a pop-up, it already has a following.  Still other retailers use pop-up stores as a way to offload excess inventory, using the temporary nature of the shop to play on customers’ sense of urgency.[8]  Finally, some online retailers have used pop-up stores as a way to get their products to consumers immediately through in store pick-up, and to allow customers to test and touch their merchandise.

Given the many benefits to creating a “pop-up” retail experience, expect to see more temporary stores popping up in major markets as retailers look for more creative and cost-effective ways to increase their sales and reach new customers.

Related topics: Landlords, Pop-up Retail, Retail, Retail Sales