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SECURITY A MAJOR SELLING POINT AT LATIN AMERICAN MALLS

By María Bird Picó

Street crime is a curse across Latin America, but the region’s malls are famously its bastions of safety.

Safety is an ace card to woo shoppers from Main Street shopping and a key reason Latin Americans flock to malls, says Peru-based mall security consultant Fernando Linares, a former operations manager of Jockey Plaza, one of Peru’s main malls.

But all that security comes at a price. Security costs Latin America’s mall landlords more than it does their U.S. or European counterparts, even though Latin America’s labor costs are lower, executives report.

“In Latin America we spend five times more in security than what the average mall spends on other regions,” said Hernán Echeverría, security corporate manager at Alto Palermo Centros Comerciales, the shopping center arm of IRSA (Inversiones y Representaciones Sociedad Anónima), an Argentina-based real estate investment and development firm.

Alto Palermo spends a combined $500,000 a month in security for its seven malls, a total of $6 million a year. Whereas security amounts to 7.9 percent of the average U.S. mall’s operational costs, it accounts for more than 20 percent for the average mall owned by companies such as Venezuela’s Grupo Sambil and Guatemala’s MultiProyectos.

But the investment pays off, Echeverría says, because it has given malls a reputation for the best security of any venue serving the public in Latin America. Parents feel comfortable letting their teen-age children roam the malls without supervision, something they would never dream of letting them do on the street, says Alfredo Cohen, vice president of Grupo Sambil, which owns six malls.

The fact is, the streets are often unsafe for everyone, he says. “Our Latin American cities have security problems,” Cohen said, in what is perhaps something of an understatement. The most recent World Health Organization report on world violence, published in 2002, says eight of the 10 countries with the worst murder rates are in Latin America. These include Brazil, Colombia, Puerto Rico, El Salvador and Venezuela. Latin America has the highest homicide rate among young people between 10 and 29: about 36.5 per 100,000, according to the same report.

Mall landlords can’t do much about street crime, but they have proved to be effective at keeping it on the street and away from their centers.

“Shopping centers are a street refuge and have become the new boulevards of our cities,” Cohen said. “To prevent delinquents from roaming freely, we need to spend money to offer a safe environment for shopping and entertainment.”

Specifically, Grupo Sambil spends $6.5 million a year on security at its malls, working out to $90,000 per center and accounting for 22 percent of its operational costs.

Good security attracts more visitors, which then produces the need for yet more security. In many cities the number of malls remains relatively small, so the few ones that there are attract more shoppers than their U.S. and European counterparts.

The mall’s function as a public space becomes especially acute on wet or hot days, when it becomes a shelter for shoppers. On such days, the number of visitors to an Alto Palermo mall can shoot up from the usual 30,000 on a Saturday to about 100,000, Echeverría says. Fashion shows and celebrity visits also boost visitors, and all of this means more work for security staff. Alto Palermo maintains a 12-member mobile squad it can deploy swiftly to any one of its malls to back up security workers.

As with anything, prevention is preferable to cure, and 90 percent of Alto Palermo’s security resources go to preventing crimes, while 10 percent gets applied to crime response, most often to shoplifting.

Other Latin American mall executives say they too expend most of their efforts on prevention, making it clear to shoppers and potential troublemakers alike that the properties are being very closely monitored.

“This perception that our malls are a haven is what attracts more shoppers every day,” said Maryssa de Urbina, retail manager at El Salvador’s Plaza Merliot, a 305,000-square-foot mall in San Salvador.

Landlords and their security staff can take a variety of approaches to make their malls safer, not all of them involving patrols and cameras, says Justo Rosas Dávila, central operations manager for G4S-Peru, a subsidiary of Britain-based international security firm Group 4 Securicor, which is contracted in Lima by Plaza San Miguel and the Ripley department stores. Social programs for the communities surrounding the client malls help, he says. “Residents feel they are part of the mall and alert us to any problems.”

The demands on a mall security officer are greater than on one guarding another type of commercial property, which drives up the cost, says Iván Darío Moreno Marín, president of Comhabitar, a mall security consulting firm in Medellín, Colombia. It also makes recruitment more challenging, executives say. After all, guarding people is a lot more complicated than standing in front of a building.

“Security at malls requires strict safety studies and trained personnel with clear concepts of customer service,” he said. “These security guards not only must guarantee safety and tranquility but serve as guides and information sources to the public.”

Such an approach is common throughout Latin America. Recent visits to two malls in Costa Rica —TerraMall and Parque de las Flores — found courteous security guards posted at entrances who helped get a wheelchair for a customer. They also kept close watch on shoppers withdrawing cash from an automated teller machine.

Such a high security profile often takes mall executives from other parts of the world aback. Not so for the ones in Latin America. “We are so used to this practice we don’t even notice it anymore,” said Claudia Campos, general manager of El Salvador-based Inversiones Simco, a mall development and operating firm. “But foreign visitors are often impressed, since in their countries guards keep a low profile.”

To be sure, these courteous guards do have teeth, and not just for flashing that friendly smile — those posted near mall entrances often carry guns.

Besides shoplifting, the most common security problem is theft of cars or their parts. In many Latin American countries, malls control the flow of cars by charging a parking fee or by issuing a ticket that must be presented when exiting the parking lot. Parking lots are monitored with video cameras and heavily patrolled. Tickets are changed daily for code and color.

Such measures have brought spectacular results. Alto Palermo reports only about 10 car thefts from the 9 million vehicles visiting its malls each year.

Despite such efforts, mall executives say they lack one important component in their fight against crime: the backing of their countries’ judiciaries. “In Europe and the United States, the judicial system is harsh with criminals, regardless of the crime’s type and size,” said Echeverría. “In our countries the laws covering crimes at retail establishments are not enforced, or are too benign. Our delinquents know that the law is on their side. There are no harsher penalties for criminal relapses, so we often see the same criminals coming back.”

Grupo Sambil’s Cohen says some of his tenants do not even bother to press charges against shoplifters. It is not worth the effort, they say, because such cases are often sidelined in an overloaded system.

The public could do more by being less tolerant of vandalism and other kinds of improper public behavior, says Alto Palermo’s Echeverría. “Human behavior responds to social and penal controls,” he said. “If the legal scenario does not change and the public does not condemn the risky or illegal acts of others, security costs will never come down.”

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