Hungarian malls: small is no longer beautiful

Hope you all got the word play in the title–take the "s" from the end of "malls" and transfer it to the front of "mall". Will Shortz, please applaud. And now to the main story.

In the last ten years Hungarians have greatly changed their shopping habits. Fifty years ago most city dwellers purchased fresh fruits and vegetables, when they were available, at the farmers’ market and their meat at the butcher’s. By contrast, in North America and Western Europe people were already purchasing virtually all their groceries in supermarkets. Of course, those supermarkets were modest in comparison to today’s. Fifty years ago there were no department stores in Hungary, while Westerners were enjoying already their convenience. Then, about twenty years later, the age of the department store arrived in Hungary with the Skála and the Centrum, only to decline and eventually disappear just like their western counterparts, except on an accelerated timetable. Within the past ten years shopping centers have become the favorite destination of shoppers, and the number of shopping centers continues to grow steadily. There is still a demand for more.

The inflection point in the shift to shopping centers was probably 1998. In that year thirteen new shopping centers opened in addition to the eleven already in existence. Out of those initial eleven ten were in Budapest. Even today 60% of the shopping centers are in Central Hungary, close to the capital. In 2000, several home improvement centers opened their doors. In 2004 the first outlet stores appeared. In addition, there are two genuine Chinese shopping centers (Asia Center and the Sárkány [Dragon] Center). Interestingly the first hypermarket was opened in Győr, the Interspar, which was followed by the Auchan, Cora, and others.

Shopping habits, as a result of all this, have completely changed. Nowadays, for example, only 31% of people buy their groceries in smaller stores, while 31% shop in hypermarkets, 11% in supermarkets, 22% in discount stores, and a small fraction in the warehouse-type stores (think Price Club). There are several discount stores that have opened stores in Hungary: Penny Market, Plus, Profit, Lidl, and (soon) Aldi.

We are nowhere close to the end of this real estate development. The prediction is that in the next few years the number of shopping centers will grow by 30%.

Currently Central Europe’s largest shopping center, the Aréna, is under construction along Kerepesi Street, the former site of a harness racing track. Another shopping center will soon be built in Budapest. The real estate developer in the latter case is a Polish firm, Echo Investment. In addition to these really large, modern shopping centers strip malls (well known in North America for a long time) are also becoming familiar sights. The Austrian Stop Shop announced the opening of eleven new strip malls, most of them outside of Budapest.

As a result, what’s happening to city centers is predictable. The small stores can’t survive the competition. There are many empty storefronts. Not long ago I saw a series of photos of what happened to the once elegant Rákóczi Street (I was especially curious because as a university student I lived on that street). A sad sight. The once elegant stores are gone, there is graffiti everywhere, and with few exceptions the nineteenth-century buildings are in disrepair. Soon enough Hungary can also begin the "gentrification" process with which American cities are trying to save their downtowns.

While I was writing this piece about shopping centers and the new Aréna Plaza on the site of the old racetrack, I had to think of István Csurka, playwright turned far-right politician. He was a constant visitor at the racetrack, betting heavily on the horses. When, after the 1956 revolution, he was an agent of the secret service, he met his "keeper" at the tracks. He must have been very sad to see the old racetrack gone, especially since he considered shopping malls worse than the Soviet occupation.