'Death of the mall is widely exaggerated': Shopping malls see resurgence post-COVID, report shows
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 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 has 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: More than 40% of 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 because of COVID-19 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 adapt to changing consumer needs
Malls must adapt to keep consumers coming 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.
Austin, Texas. The Domain, a mixed-use project with retail, offices units and hotels, is getting a multimillion-dollar makeover, including new high-end tenants and new facades for retailers including J.Crew and Lilly Pulitzer.
Philadelphia. Urban Outfitters (URBN), which is based in Philadelphia, has opened a new store Reclectic in the Philadelphia Mills mall. The store, which will feature products and samples from Anthropologie, Free People, Urban Outfitters and "gently used inventory" from the retailer's rental brand Nuuly, aims to target Generation Z shoppers, who appreciate thrift stores.
Phoenix. The Chandler (Ariz.) Fashion Center averted the empty-anchor problem presented by the closing of Nordstrom with the arrival of sporting goods store Scheels, which will open its only Arizona location at the mall. And the Scottsdale (Ariz.) Fashion Square filled its empty anchor spots with an Apple store and a co-working space. Life Time also opened a fitness club near the mall. A luxury wing opened in 2018 now has ultra-high-end retailers such as Dior, Saint Laurent, Nobu and Jimmy Choo. And a renovation is planned for the mall's wing anchored by Nordstrom.
South Bend & Mishakawa, Indiana. An influx of new retailers and restaurants is helping the University Park Mall in the South Bend-Mishawaka metro area remain 90% full despite the closing of Sears in 2019 and the loss of two restaurants.
'We get the community at the mall'
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 said, "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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This article originally appeared on USA TODAY: Are American shopping malls making a comeback? Signs emerge in report
