In recent years, many stores have widened their lines and no longer specialize in only one form of merchandise. Such operations as supermarkets may sell anything from CDs and DVDs to refrigerators, and drugstores are as apt to carry pots and pans as well as pills. However, in order to insure the success of small as well as large store operations within the shopping center, management specialists must try to create a harmonious balance and limit the amount of “overlapping merchandise” that causes unnecessary competition. Big Box stores sell almost everything but are usually a “stand-alone” store

One approach is to regulate the retail character of the center through “purpose and use” clauses in leases.

This is one of the most important provisions in a shopping center store lease. Since the lease term will run anywhere from 10 to 30 years, the tenant will try for a provision that will permit him to make the broadest possible use of the premises. The owner or developer, on the other hand, will be thinking of the welfare of the entire center, and he will want to define and limit the business use of each tenant as to the line of merchandise it will sell. He will also want a provision that controls the kind of products sold and even the price range of the merchandise. In setting up so-called “use” clauses, don’t characterize the business merely as a “shoe store” or a “TV store”. Instead, set forth the nature of the business in more detail.

The purpose of regulating competition within a shopping center is to establish a proper balance between too much and too little competition within the center. One of the basic attractions of a well-planned shopping center is the potential increase in the business of each tenant because of the proximity of other tenants whose operations are successful. Each tenant wants to be assured that the other stores will be occupied by tenants whose businesses will complement and benefit his business rather than engage in destructive competition with his business.

An exclusive right clause gives the tenant the exclusive right to engage in a specified business or sell a particular line of merchandise within the center or a particular portion of the center. The trend is against exclusives, either for the type of store or for a specific line of merchandise. The reasons for this trend are not hard to find: a large number of shoppers like to do comparison shopping and modern merchandising methods have led many stores to broaden their lines so that a great deal of overlapping results. In most instances shopping center developers should insist that, if they grant an exclusive, the exclusive be limited to the main line of business of the tenant as specified in the use clause in the lease. With this type of provision, merchandise sold by the tenant as an incidental line of merchandise doesn’t come within the purview of the exclusive and may be sold by other tenants in the shopping center.