Tourists Love Horton Plaza, but What About Shoppers?

Horton Plaza, which sent a wave of excitement through San Diego’s downtown when it opened 19 months ago, has settled into the mundane but important business of fine-tuning its attractions in order to draw more customers to the downtown plaza.

With 131 retail stores and four major department stores, the center has been described as the “Disneyland of shopping malls.” It will continue to emphasize its unique and different shops.

However, if it becomes known as a tourist attraction instead of a shopping center, it could draw “too many people carrying cameras, and people with cameras are not shoppers,” according to Palo Alto-based retail business consultant Edward Steichen. “They may stop and buy lunch, but they’re not going to buy a suit.”

Horton Plaza has become a minor tourist attraction in a county that boasts many natural and man-made attractions. Nearly 10,000 cars passed through Horton Plaza’s garage on Thanksgiving Day, despite the fact that only one restaurant and the United Artists’ cinema complex were open.

‘Jury Is Still Out’

Food and entertainment, which typically generate about 10% of a mall’s revenue stream, have been contributing a whopping 30% of sales at the center.

But the “jury is still out” on whether Horton’s whimsical design and its entertaining atmosphere will help it generate the “sustaining volume they’ll need to survive,” according to Steichen.

Horton Plaza General Manager Robert Dobson said Horton’s smaller retail stores enjoyed “damn good” sales during the center’s first full calendar year. Its varied specialty retail and food outlets generated an annual average of $254.37 in sales per square foot. That average, however, does not include sales by The Broadway, Robinsons, Mervyn’s, Nordstrom and the Irvine Ranch Market, which do not release figures.

The Washington, D.C.-based Urban Land Institute recently reported that the nation’s larger malls generated median sales of $179 per square foot during 1986. It is difficult to compare the sales figures, however, because Horton and the Urban Land Institute use different yardsticks to measure sales.

Although the center’s four department stores do not make their revenue figures available, retail industry observers suggest that, of the four majors, Nordstrom is enjoying the most success.

“Nordstrom is doing well, but I don’t now know how it’s doing to relative to other Nordstroms,” said one of those observers, who asked not to be identified. “But the others--Mervyn’s, Broadway and Robinsons--are eating it bad.”

Horton Plaza’s department stores “face a long, hard road . . . unless they’re able to do something better or different than their (suburban stores),” said Frank Spink, who edits the Washington, D.C.-based Dollars & Cents of Shopping Centers publication. “Maybe it means (stocking) goods for a broader customer base, or offering more specialized merchandise.”

Many of the center’s shops and department stores are looking for “the right combination of merchandising and marketing” that will draw more customers into their stores, according to Gary London, a San Diego-based analyst who tracks retail trade for the Laventhol & Horwath accounting firm.

But one San Diego mall operator suggested that the major department store chains will be slow to adapt their merchandising to Horton Plaza’s downtown location because most of their experience has been gained at suburban centers.

“You don’t see too many people rushing downtown for (an early morning) lamp sale,” said Dobson, in a reference to department stores that include downtown stores in advertisements for sales that are more likely to draw crowds at suburban locations.

Another mall operator said Horton’s department stores will shy away from costly merchandising, display and advertising experiments because “investors have sent department store managers the message that they want costs cut.”

Still, most retailers hope Horton Plaza “will be successful because it breaks all the rules,” said London, who described the center’s first-year progress as “a big surprise to most traditionalists in the shopping center business.”

Horton Plaza has had its share of problems--some of which are beyond its control--that may have hurt traffic at the center:

- Downtown housing has been slow to develop. “It would be silly” to pretend that the lack of nearby housing hasn’t hurt, Dobson said.

- The lack of a convention center has reduced sales to out-of-county visitors by about 25%. That figure will improve, he said, as upscale visitors begin staying at the adjacent Omni International Hotel and other planned downtown hotels.

- Two restaurants on Horton Plaza’s troubled restaurant row have failed to open. A third restaurant closed just a few months after it opened. One restaurant owner has gone to court, claiming that the Hahn Co. has failed to adequately market the center.

The mall’s premier restaurant location, which boasts a view of San Diego Bay and North Island, will soon be opened to the public--not as a restaurant but as a “rest stop” for shoppers and tourists, Dobson said.

- Plans for a long-awaited nightclub fell through after the proposed operator failed to obtain a liquor license. The mall is “back to Square One” in its search for a nightclub, Dobson said.

Despite those setbacks, Horton Plaza’s “ability to draw traffic is improving,” Dobson said. “And our ability to draw people is our key battle. You’ve got to remember that, for 25 years, people have not had a reason to come downtown.” Others say it’s still too early in the game to gauge Horton’s success.

“A shopping center’s magic years are from 10 to 20,” according to Spink. “They seem to peak both on sales per square foot and from the bottom line at about 10 years.”

To help generate more traffic in the near-term, Horton Plaza is adding more traditional storefronts that customers have demanded since the mall opened in August, 1985.

A dry cleaner and a postal service shop recently opened, and a drugstore is planned for the space last occupied by a Christmas decoration store. The newest eatery on Horton’s troubled restaurant row is a wholesome, family-oriented Marie Callender’s that promises to concentrate on good food and dependable service.

The center also is tinkering in less-noticeable ways:

- It recently reworked confusing parking garage signs to help customers find their parked cars. The center’s managers also want to thwart downtown office workers who avoid parking fees by manipulating Horton’s free-parking policy.

- A small, street-level parking lot was recently created to give Irvine Ranch Market customers easier access to the specialty grocery store and eatery.

- Horton is experimenting with store hours. Major tenants recently were asked to set later Saturday closing times, moving from 6 p.m. to 8 p.m., during the coming summer in an attempt to attract more tourist dollars.

- Horton has been bolstering advertising and marketing aimed at the thousands of downtown office workers.

Stores are toying with their product mix because, unlike traditional malls that draw from nearby neighborhoods, one in three Horton Plaza shoppers is a tourist or a San Diego County shopper from a neighborhood that is fairly far from downtown, Donson said.

But boosting the center’s share of San Diego County’s intensely competitive retail market will be difficult because the downtown site is “surrounded by a wagon train of (easily accessible) regional shopping centers,” London said.

Surprisingly, competing malls in San Diego say Horton Plaza has not had a severe impact upon their sales.

Fashion Valley Shopping Center’s sales dipped by about 5% during 1986, but a spokesman said most of that drop seemed to be generated by the opening of North County Fair in Escondido.

“Horton’s impact was not as great as we thought it would be,” Fashion Valley spokesman said. “And we initially thought it might hurt us dramatically.”

“The effects of Horton Plaza on our center have been minimal,” said Maureen McDaniel, a St. Louis-based spokeswoman for May Centers, a subsidiary of May Deptartment Store Co., which operates Mission Valley Center. “We’ve done studies of the competition, and, frankly, Horton Plaza has never been a concern” to Mission Valley.