I was going to write about something else this week when I got an email from one of my favorite people, Rita Mitchell, the Center Director of the USM Small Business Development Center in Hattiesburg, Mississippi. She sent an article that said more than 70% of malls in America had closed and wondered if that could possibly be true.
So I did a little research, since I also saw stats about the death of American malls. But instead of doom and gloom, I found some good news.
CNN reported last summer on recent market analysis from Coresight Research showing that “malls are not going extinct, they are merely adapting to a new environment.” And occupancy levels last year were higher than before the pandemic.
Coresight reported that from 2019 to 2022, foot traffic in top-tier malls was up 12%, and traffic in lower-tier malls was up 10%.
The research shows that “between 2020 and 2022, [top-tier] malls reported an annual growth rate of 5%” and collected $7.5 billion in total revenue in 2022, while lower-tier malls earned $6.4 billion and grew almost 9%.
The country’s top high-end mall owners said there was recently “high demand for retail space.” Interestingly, malls don’t necessarily aim for 100% occupancy since owners want available space to attract new retail concepts.
Instead of fearing e-commerce, malls are embracing online retailers. The research shows that “some digital-only brands like Warby Parker, Allbirds, and Wayfair (called AllModern) started setting up shop in malls to expand their reach at a lower cost.
Mall developers are also encouraged by the preference of many millennials and Gen Zers to go to the mall. The International Council of Shopping Centers (ICSC) reports that 73% of Gen Z shoppers and 65% of millennials visited a mall in a recent month last year to shop and have an experience.
CNN also reports that, according to ICSC, “Almost two-thirds of Gen Z consumers also go to malls for the social aspect.”
Coresight expects “the rise of both retailers’ and mall operators’ omnichannel strategies and investments will disproportionately benefit the future growth of top-tier malls.”
If you’re interested in opening a store in a mall, read about how mall traffic is shifting.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbusinesscurrents.com, follow her on Twitter @Rieva, and visit her website SmallBusinessCurrents.com to get the scoop on business trends and sign up for Rieva’s free Currents newsletter.
