About five years ago or so, we saw a spate of online articles and blogs mourning the mall, eulogies delivered through pictures of eerie abandoned interiors and vast empty parking lots. Briefly, we all became 21st century Wordsworths lamenting our lost youth among the ruins of Tintern Abbey. The COVID-19 pandemic only exacerbated the decline of the mall, and today, more than two years after the beginning of the pandemic, the European owner of Westfield Malls is looking to cut its losses and unload its portfolio of American malls.
This seems like the final nail in the coffin of what was for decades an American institution, the mall not just a cathedral of commerce but the social hub of communities. Throughout the 80s and 90s, suburban teenagers escaped home and school to join their friends at the mall, losing themselves in the aisles of CDs and cassettes at Sam Goody, books and magazines at B. Dalton, and JNCOs at Gadzooks, and finding an identity in the process. Conventional wisdom would say that ecommerce and social media have taken up the mall’s role as both a social hub and a place to discover new products and identities, but perhaps it's still too early to mourn the passing of the mall.
Retail expert Natalie Kotlyar is “here to tell you that the mall is not dead. Consumers are still going into the malls. And they will continue to go into the stores.”
As pandemic restrictions are lifted, more people get vaccinated, new coronavirus strains cause milder symptoms, and people generally feel safer leaving their homes again, malls have seen an increase in foot traffic over pre-pandemic levels. This trend began about 12 months ago and shows no sign of slowing. Moreover, 71% of adults feel comfortable shopping at malls as of April 2022, up from 20% in May 2020 and 65% in July 2021. Simon Property Group, the nation’s largest mall operator, reported third quarter earnings in 2021 that topped second quarter 2019 earnings. Like those baggy pants of the 90s, the mall is back.
But for how long? Those numbers have been propped up by pandemic stimulus and robust tax returns. Kotlyar also attributes this boost to retail sales to pent-up demand and the first in-person back-to-school shopping season since the pandemic began. Supply chain issues, rising gas prices, and rampant inflation, along with the economic uncertainty created by the ongoing war in Ukraine, could lead to shortages on the shelves and belt-tightening at home.
Furthermore, the high performance of some malls is not indicative of an overall, across-the-board trend. Some malls are doing well, while others continue to struggle. Movie theaters, a staple of mall income, have struggled as blockbuster movies are no longer exclusively released in theaters. It’s really only malls in big cities experiencing a renaissance. INRIX, a transportation data company, found that malls in Chicago, Atlanta, and Austin saw increases in visits over their January 2020 numbers, while New York City mall visits returned to their pre-pandemic baseline. But not all big city malls are thriving. Malls in Los Angeles have not yet recovered to their pre-pandemic baseline. This is most likely due to the fact that Los Angeles County has re-imposed its mask mandate.
Before announcing their total divestment from the American market, Westfield owner Unibail-Rodamco-Westfield’s original plan was to only sell its smaller, regional malls. This plan offers some clues as to the future of the mall. Regional malls may continue to lose customers to big box stores and dollar stores, but malls in big cities may still be sustainable.
Malls that can offer a stimulating shopping, entertaining, and dining experience will most likely remain viable. Smaller malls in worse locations that offer fewer options, on the other hand, give shoppers little reason to leave the comfort of their computer or smartphone. So while some malls will continue to thrive in this new landscape, others are doomed to be repurposed as Amazon distribution centers, a fate more Ozymandias than Tintern Abbey. Look on my works, ye mighty, and despair, indeed.
The takeaway is that even in the era of convenient online shopping and next-day delivery, people still value the mall experience. If they just want to buy stuff, they will buy online. If the mall can’t offer them anything that Amazon can’t, they will buy online. But if a mall can deliver on the total package—a diverse selection of stores, great restaurants, entertainment, and convenient service options (such as automobile maintenance), along with places to socialize—it will be able to entice customers, though perhaps in smaller numbers than in the past.