Mall rats are a dying breed. Nearly a fifth of the nation’s enclosed malls are experiencing vacancy rates of 10 percent or higher according to an recent article in the New York Times. It was very apparent over the holidays that the stores were nearly dead and the food courts were empty. Where have all the shoppers gone?
More than two dozen U.S. enclosed shopping malls have been closed since 2010 and more are on the brink. However, the high-end malls are thriving as income inequality continues to widen. Meanwhile retail anchor stores like Sears, Kmart and JC Penney have taken massive hits and taking down the malls with them.
Surprisingly online shopping is not really to blame. According to the article, less than 10 percent of retail sales actually take place online. The problem is a glut of stores in some parts of the country. In essence, they are “over retailed.” There is now a website dedicated to fascination of tracking the decline of the mall called deadmalls.com.
“You see the A-rated malls, the flagship malls, performing very well,” said Steven Lowy, co-chief executive of Westfield Corporation, which is now a major global player among mall owners. In the United States, Westfield has rid itself of malls in the Midwest while focusing on the more affluent coasts. “Our business is more regional and high-end focused,” he said. “There are gradients of dead or dying or flat, but anything that’s caught in the middle of the market is problematic.”
Read The Economics (and Nostalgia) of Dead Malls here.
– Lauren Dimet Waters
Photo: Erica Hayes
Tags: flagship malls, JC Penney, Kmart, Lauren Dimet Waters, Malls closing, Rainbow Mall in Niagara Falls, Sears, Shopping Malls, Steven Lowy, The Economics (and Nostalgia) of Dead Malls, Westfield Corporation