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I think gladhands nailed it. The malls that are thriving have an Apple Store and a movie theatre. Suburban Mall Plaza's have taken over indoor malls. There is a mall declining where I grew up and there is a big plaza with a Target, Khols, Dicks, Old navy, and a movie theatre, etc that's thriving
Much of it is due to location. Malls in neighborhoods that have seen better days aren't doing too great, and many of these neighborhoods are older suburban ones which have hollowed out as development has pushed farther and farther out--at least in many Southern cities.
It think online shopping certainly plays a role, and that role will continue to grow. I do think the death of the suburban shopping mall overstated. In all of this hyperbole no one has mentioned how developers vastly overbuilt shopping centers in the 70s and 80s. (Get ready to see similar patterns in this huge bulk of urban apartments hitting the market across the country.) Part of what you're seeing with some of these declining malls is little more than a market correction. It's also true that class A shopping centers are thriving and making more $ than at any point. Those malls aren't limited to the exclusive super regional centers like Fashion Square in Scottsdale, or Somerset in suburban Detroit that have super high end stores. They exist in every market. What differentiates them are several things.
1. Level of financial commitment by principle management company (e.i. updates, renovations ect) Ever since GGP emerged from bankruptcy there are a slew of malls in it's portfolio that are in otherwise healthy markets and have fallen into a somewhat dingy/disrepaired status. Where they sit in strong retail corridors, surrounded by solidly middle class/upper middle class regions. The only thing they have in common is that GGP is using them as cash cows, and not investing in them, leading to an under performance by the property. On the other hand you have super aggressive management companies like PREIT that constantly invest in and upgrade their portfolios and these malls are very healthy with very low vacancy rates. There is little difference in location and market demographics between the two.
2. Shifting commercial corridors/Financial economic viability of greater region they service. This is true especially where you have multiple malls classified as super regional centers in areas where they overlap coverage. Most common in metro areas of larger scale. The malls closest to the healthiest incomes tend to outlive the older malls in areas that have demographics shifting toward more blue collar. (see inner ring suburbs) In the 70's/80's these inner ring shopping centers were at the core of the action, the action has migrated further out.
In the words of Mark Twain "The reports of my death are greatly exaggerated."
Much of it boils down to retail square footage per capita, crossed with people's buying power. Metros where malls have been added might tend to have too much square footage. Metros that have grown but haven't added major malls tend to do better.
The typical metric is that the US averages north of 40 sf of retail per person, of which 20 sf is malls of various kinds. The number got up to 43 at least must have fallen by now. I don't know where these metrics put the dividing line between mall and non-mall given the many formats.
Obviously there are nearly infinite variables. One is the strength of the local urban retail districts...urban storefront retail can whittle away at the mall percentages. Tourism also adds a lot to some areas and is lacking in others.
Mega Malls/ nationally acclaimed shopping centers that focus on luxury goods are the ones staying afloat. For example, King or Prussia Mall outside of Philadelphia is one of the (if not the largest) malls in the nation, and there is a luxury retailer opening up almost every week. The combo of its status, its influence, the wealth and the high population around the mall are what makes it relevant. Also Simon (the owner) has been adapting KoP to the changing times.
Your standard suburban mall is a dying breed. If they are in a nice area, they are likely repurposed into a new open shopping center or some sort of mixed use development.
Many malls are succeeding because malls are not in a vacuum. You have to adapt to survive. Blockbuster, Kmart, Sears, etc weren't killed by Amazon and Walmart. They were killed by failing to adapt, and terrible corporate practices. The Netflix idea was actually presented to Blockbuster first, and they laughed at it. Walking into Kmart felt like walking into 1991. Welp.
The malls today there are getting more innovative are the ones sticking around. Same for the malls that are asserting their dominance in a region. The days of 3-4 malls in one city is over.
Not true. Haywood Mall in Greenville, SC isn't high end, but it's definitely not going anywhere anytime soon. The mall is in better shape now than 10 years ago. Same can be said for Columbiana Mall in Columbia, SC.
I think malls have to adapt to survive, not be high end.
In Chicagoland, the most successful malls tend to be the largest and sort of serve as the downtown area for their regions.....such as Woodfield (Schumburg) for the Northwest suburbs and Oakbrook (Oak Brook) for the west suburbs. Both Woodfield and Oakbrook draw shoppers from all over the metro area.
Only two major malls in the Chicago area, the aforementioned Oakbrook and Old Orchard (Skokie....which really serves much of the North suburban/ North Shore area) have remained through their entire existence as outdoor malls. This type of setting, IMHO, has increased their drawing power since it more in tune with the type of settings that shoppers seek today. In some ways, both Oakbrook and Old Orchard share characteristics with life-style centers.
The three malls mentioned here also benefit from the degree of high end stores they have. Interestingly, Old Orchard, Oakbrook, and Woodfield have the only Nordstroms in suburban Chicago (while its Chgo flagship is on Michigan Ave.).
Everyone wants to put all the blame on e-commerce, but the major department stores and mole staples like gap and Banana Republic have decreased and quality so much, and the prices haven’t dropped. I tend to buy higher and clothing made in developed nations, but when I need something cheaper, and the stuff at Target is just as good as the stuff at Macy’s.
You don't think the majority of the reason why malls are dying is because of less foot traffic due to e-commerce?
You don't think the majority of the reason why malls are dying is because of less foot traffic due to e-commerce?
It's definitely played a role, but it's role as the overlord big box mall killer is overblown. Again going back to Kmart, they did nothing to make people want to shop there. Like the video said, being in the store almost felt depressing. Same with many malls that were nothing but a large white shell with carpet. That'll hurt foot traffic.
Walmart and Target are doing fine because they're keeping up with the times. Even Best Buy seems to be doing a better job now at keeping up. Last time I went to Best Buy, most everything that was in the store, wasn't there just 5 years ago. Sears on the other hand, never caught on with that and stayed dated and stale.
Online plays a role, but as a store or a mall, you really just have to adapt as best as possible. Chipotle is now the "cool" place to eat, like Burger King was in the 90s. People's tastes have changed overtime and Chipotle has took advantage, while BK keeps coming out with gimmicks.
Also as a mall you have to know your audience. Seems you can't just throw anything and everything into a mall anymore. They're becoming more niche driven. The ones that are just throwing in whatever don't seem to be sticking around.
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