Are American shopping malls making a comeback? Signs emerge in report
The malls of America have begun to recover from the consumer exodus spurred on by the COVID-19 pandemic.
Well, at least some of the malls have, according to a recent study from Coresight Research, which tracks consumer, retail and tech trends.
Since the lifting of restrictions and consumer behavior began returning to pre-pandemic normalcy, physical retail has bounced back, Coresight Research said. More stores opened in 2022 than closed – the first time that's happened since 2016 – and malls' sales grew more than 11% in 2022 to nearly $819 billion, the firm said in its The State of the American Mall report.
At the end of 2022, mall occupancy was at 95.1%, up from about 92% in 2020, Coresight says. "Anything over 92% is a full mall, because you want to leave flex space," Coresight Research founder and CEO Deborah Weinswig told USA TODAY. "You need constant turn, in a good way, in a mall because you need new tenants."
Consumers are returning to the mall, too. Traffic at top-tier malls – those with luxury retailers such as Gucci and newer direct-to-consumer brands (such as Untuckit) and more affluent customers – was up 12% on average in 2022 over pre-pandemic 2019 levels, while traffic was up 10% at non-top-tier malls (those with an empty anchor retailer, declining sales).
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Overall, traffic reported at indoor malls has continued to rise in August with more than 40% of U.S. adults reported visiting a mall within the past two weeks, up from 35% at the beginning of June and 30% in the beginning of April, according to Coresight's ongoing consumer survey of 1,600.
Not only is traffic level up, but so is "the amount of time people are spending in retail," Weinswig said.Also, those avoiding malls due to COVID concerns has fallen below 15% since the beginning of July, Coresight found. Those avoiding malls had been at 20% or higher most of the spring.
"The death of the mall is wildly exaggerated," Weinswig said. "The other side of that is the opportunity is more significant."
Malls must adapt to keep consumers flowing in, particularly as mall staples such as Sears and JCPenney have closed hundreds of stores in the past few years, leaving many shopping centers with large, empty stores.
“The classic mall, the enclosed, two-level, air-conditioned mall has changed,” David Uhles, senior vice president of Western Retail Advisors, a commercial retail estate brokerage with offices in Phoenix and Irvine, California in May 2023 told The Arizona Republic, part of the USA TODAY Network. “Shopping behaviors have changed and the demand for experiences has shifted.”
Some of the changes at malls across the U.S.
Many U.S. malls and retailers are looking to the retail boom in China, which includes integration of online and in-store shopping. Another tip from Chinese malls: create a mixed-use destination that encourages shoppers to come and stick around, Coresight's Weinswig said.
The recasting of the shopping center to serve multiple purposes and foster "a sense of community" were among the advice to malls and retailers delivered by consulting and advisory firm Deloitte Services' The Future of Shopping report in October 2021.
"Retail in China is consumer-focused and in the U.S., it was retail-focused," Weinswig said. "I think what happened during the pandemic is (U.S. malls and retailers) became consumer-focused."
Retail's post-pandemic appreciation of consumers works both ways, she says. Consumers also value the in-store experience, Weinswig said. When it comes time to buy sheets, for instance, they may order online, but pick them up in person so they can touch the sheets.
And, she added, "we get the community at the mall."
Contributing: Lori Hawkins, Liam Price, Ed Semmler and Corina Vanek, USA TODAY Network.
Follow Mike Snider on X and Threads: @mikesnider & mikegsnider.
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