Shopping malls have been a cornerstone of the retail industry for decades, serving as both economic engines and social hubs for communities around the world. However, the rise of e-commerce, changing consumer preferences, and the impact of the COVID-19 pandemic have presented significant challenges for the industry. In this in-depth blog post, we‘ll explore the latest shopping mall statistics and trends, offering insights and analysis from the perspective of a retail and consumer expert and a picky shopper.
The Shopping Mall Landscape
To understand the current state of shopping malls, it‘s important to first examine the different types of properties that make up the industry. According to the International Council of Shopping Centers (ICSC), there are several distinct categories of malls, each with its own characteristics and performance metrics:
- Regional malls: Enclosed properties with 400,000 to 800,000 square feet of gross leasable area (GLA) and at least two anchor tenants, such as department stores or movie theaters.
- Super-regional malls: Similar to regional malls but larger, with over 800,000 square feet of GLA and three or more anchor tenants.
- Outlet malls: Open-air or enclosed properties that feature discounted merchandise from a variety of retailers, often located in tourist destinations or along major highways.
- Lifestyle centers: Open-air properties that blend retail, dining, and entertainment offerings in an upscale, outdoor setting.
- Power centers: Open-air properties that feature several big-box retailers, such as home improvement stores, discount department stores, and warehouse clubs.
As of 2021, there are approximately 116,000 shopping malls and centers worldwide, with the United States being home to around 1,000 enclosed malls (Statista, 2021). However, the performance of these properties varies widely depending on factors such as location, tenant mix, and overall market conditions.
Mall Occupancy Rates and Rent Trends
One key metric for assessing the health of shopping malls is occupancy rate, which measures the percentage of available retail space that is currently leased. According to Cushman & Wakefield‘s 2020 U.S. Shopping Center Report, the overall occupancy rate for U.S. malls was 92.7% in Q4 2020, a decline from 94.4% in Q4 2019. This drop can be largely attributed to the impact of the COVID-19 pandemic, which accelerated store closures and bankruptcies among key mall tenants.
However, occupancy rates vary significantly across different mall types and geographic regions. For example, the occupancy rate for super-regional malls in the U.S. was 94.3% in Q4 2020, compared to 90.8% for regional malls and 96.1% for outlet malls (Cushman & Wakefield, 2020). Meanwhile, malls in the West and South regions of the U.S. tend to have higher occupancy rates than those in the Northeast and Midwest.
| Mall Type | Occupancy Rate (Q4 2020) |
|---|---|
| Super-regional | 94.3% |
| Outlet | 96.1% |
| Lifestyle center | 93.5% |
| Power center | 95.2% |
| Regional | 90.8% |
Source: Cushman & Wakefield, U.S. Shopping Center Report (2020)
In terms of rent trends, average mall rents in the U.S. have remained relatively stable in recent years, despite the challenges facing the industry. According to CBRE‘s Q4 2020 U.S. Retail Figures report, the average asking rent for U.S. malls was $34.71 per square foot, a slight increase from $34.49 per square foot in Q4 2019. However, rent growth has slowed significantly compared to previous years, and many mall operators are offering concessions and incentives to attract and retain tenants.
Sales per Square Foot
Another important metric for evaluating mall performance is sales per square foot, which measures the average revenue generated by each square foot of retail space. In 2019, the average sales per square foot for U.S. malls was $550, according to ICSC data. However, this figure varies widely across different mall types and tenant categories.
For example, luxury and high-end malls tend to have much higher sales per square foot than their more value-oriented counterparts. The Mall at Short Hills in New Jersey, one of the most productive malls in the U.S., generated sales of $1,630 per square foot in 2019, while the Mall of America in Minnesota, the largest mall in the country, generated sales of $1,079 per square foot (Green Street, 2020).
| Mall | Sales per Square Foot (2019) |
|---|---|
| The Mall at Short Hills | $1,630 |
| The Grove | $1,589 |
| Bal Harbour Shops | $1,547 |
| The Mall at Rockingham Park | $1,105 |
| Mall of America | $1,079 |
Source: Green Street, U.S. Mall Outlook (2020)
The Impact of Anchor Tenants and Tenant Mix
One of the key factors influencing mall performance is the presence and quality of anchor tenants, which are the large, well-known retailers that drive foot traffic and serve as a draw for other tenants. Traditionally, department stores have served as the primary anchors for shopping malls, but as these retailers have struggled in recent years, many malls have been forced to adapt and diversify their tenant mix.
According to a 2019 report by Cushman & Wakefield, non-retail tenants, such as dining, entertainment, and services, now account for over 20% of mall space in the U.S., up from just 10% a decade ago. This shift reflects changing consumer preferences for experiential offerings and the growing importance of malls as community hubs and gathering spaces.
Some of the most common non-retail tenants in malls today include:
- Restaurants and food courts
- Movie theaters and entertainment venues
- Fitness centers and gyms
- Salons and spas
- Medical clinics and dental offices
- Co-working spaces and offices
By incorporating a diverse mix of tenants and amenities, malls can create a more engaging and dynamic environment that appeals to a wider range of consumers and drives repeat visits.
Technology and Data Analytics in Shopping Malls
In addition to diversifying their tenant mix, many malls are also leveraging technology and data analytics to better understand and engage with shoppers. Some of the most common technologies and strategies being employed include:
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Mobile apps and loyalty programs: Many malls have developed their own mobile apps that offer features such as interactive maps, store directories, and exclusive discounts and promotions for app users. These apps can also be used to gather valuable data on shopper behavior and preferences.
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Beacon technology and location-based marketing: Beacons are small, wireless devices that use Bluetooth technology to communicate with shoppers‘ smartphones and deliver targeted messages and offers based on their location within the mall. This allows retailers to engage with shoppers in real-time and drive foot traffic to specific stores or events.
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Social media and user-generated content: Malls are increasingly using social media platforms like Instagram and TikTok to showcase their offerings and engage with shoppers. Many are also encouraging shoppers to share their own photos and experiences using branded hashtags, creating a sense of community and driving viral buzz.
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AI-powered personalization and recommendations: Some malls are experimenting with AI-powered chatbots and recommendation engines that can provide personalized product suggestions and shopping tips based on a shopper‘s browsing and purchase history. This can help create a more seamless and efficient shopping experience and drive incremental sales.
By embracing these technologies and strategies, malls can stay relevant and competitive in an increasingly digital and data-driven retail landscape.
Successful Examples of Mall Transformation
Despite the challenges facing the industry, there are many examples of malls that have successfully adapted and transformed to meet the changing needs and preferences of consumers. Here are a few notable case studies:
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American Dream Mall (East Rutherford, NJ): This massive, 3 million square foot mall features a unique mix of retail, dining, and entertainment offerings, including an indoor theme park, water park, and ski slope. By creating a one-of-a-kind destination that appeals to a wide range of consumers, American Dream has been able to attract visitors from across the region and beyond.
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The Shops at Fosse Park (Leicester, UK): This struggling mall was recently transformed into a thriving community hub through a combination of strategic tenant mix adjustments and experiential offerings. The mall now features a diverse range of retailers, restaurants, and services, as well as a cinema, bowling alley, and trampoline park. As a result, foot traffic and sales have increased significantly, and the mall has become a popular gathering place for local residents.
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Alderwood Mall (Lynnwood, WA): To adapt to the changing needs of its community, this mall has undergone a series of renovations and expansions in recent years, adding new tenants such as a grocery store, fitness center, and medical clinic. The mall has also introduced a variety of experiential offerings, such as a farmers market, outdoor concert series, and holiday events, to drive foot traffic and create a sense of community.
These examples demonstrate the potential for malls to remain relevant and successful by embracing change and innovation.
The Impact of the COVID-19 Pandemic
Of course, no discussion of shopping mall trends would be complete without addressing the impact of the COVID-19 pandemic. The pandemic has had a profound effect on consumer behavior and preferences, accelerating the shift towards e-commerce and forcing malls to adapt to new safety and hygiene protocols.
According to a survey by ICSC, 73% of U.S. consumers changed their shopping habits due to the pandemic, with many opting for online shopping, curbside pickup, and contactless payment options. As a result, mall traffic and sales declined significantly in 2020, with some properties seeing foot traffic drop by as much as 90% during the height of the pandemic.
To adapt to these challenges, many malls have implemented a range of safety measures and protocols, such as:
- Increased cleaning and sanitization
- Mask requirements and social distancing guidelines
- Contactless payment and pickup options
- Occupancy limits and traffic flow management
- Air filtration and ventilation improvements
While these measures have helped to restore some consumer confidence, the long-term impact of the pandemic on shopping malls remains to be seen. Some experts predict that the pandemic will accelerate the closure of underperforming malls and the consolidation of the industry, while others believe that malls that are able to adapt and innovate will emerge stronger and more resilient.
Insights and Recommendations for Mall Stakeholders
Based on the latest shopping mall statistics and trends, here are some insights and recommendations for mall operators, retailers, and investors:
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Focus on experiential offerings and community building: To differentiate themselves from online competitors and drive foot traffic, malls need to offer unique, engaging experiences that cannot be replicated online. This can include everything from events and attractions to personalized services and amenities.
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Embrace omnichannel retail and technology: Malls that are able to seamlessly integrate online and offline channels, such as through click-and-collect and in-store returns for online purchases, will be best positioned to meet the needs of today‘s hybrid shoppers. Additionally, investing in technologies like mobile apps, AI, and data analytics can help malls better understand and engage with their customers.
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Diversify tenant mix and explore alternative uses: To remain relevant and resilient, malls need to move beyond traditional retail and incorporate a wider range of tenants and uses, such as dining, entertainment, healthcare, education, and residential. This can help create a more vibrant and sustainable ecosystem that is less dependent on any one sector or tenant.
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Prioritize health, safety, and sustainability: In the wake of the pandemic, consumers are increasingly prioritizing health, safety, and environmental responsibility when choosing where to shop and gather. Malls that are able to implement effective safety protocols, promote wellness and sustainability, and communicate these efforts to their customers will be better positioned to build trust and loyalty.
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Monitor market trends and consumer preferences: Finally, it is essential for mall stakeholders to stay attuned to the latest market trends and consumer preferences, and be willing to adapt and innovate in response. This may require significant investments in research, technology, and talent, but the alternative – becoming irrelevant and obsolete – is far more costly in the long run.
Conclusion
The shopping mall industry is facing a period of unprecedented change and challenge, but also one of significant opportunity and potential. By embracing new strategies, technologies, and partnerships, and staying attuned to the evolving needs and preferences of consumers, shopping malls can continue to play a vital role in the retail landscape and the communities they serve.
As a retail and consumer expert and a picky shopper myself, I believe that the future of shopping malls lies in their ability to offer something truly unique, engaging, and valuable – whether that is an unparalleled selection of products and services, an immersive and entertaining experience, or a sense of community and belonging. The malls that are able to achieve this, while also prioritizing safety, sustainability, and convenience, will be the ones that thrive in the years ahead.
