Brick and mortar malls -the onetime lifeblood guiding the American consumer – where people went to shop, eat and socialize are in peril. Retailers are closing their doors at an alarming rate.
As of June 14, 2019, U.S. retailers had closed 6,971 stores, while opening only 2,978 stores, according to real estate tracking done by Coresight Research. It is safe to say the tsunami of mall closures may also continue.
Experimental tactics by malls – such as bringing in tenants that aren’t focus on just selling product or experiences like Tesla and community-focused food halls – haven’t drawn in extra foot traffic. Mall owners were happy in 2018 as traffic increased and hit its peak in August of that year. Retailers were aggressively advertising significant sales and other promotions. This tactic is only sustainable for so long as selling discounted merchandise is not a long-range plan.
Increasing foot traffic is key
Retailers are beginning to pull back the consumer-friendly discounts. This is a reason traffic is dropping at malls across the country. Another issue, one that has been rising for years, is the increase of online shopping, especially through the online behemoth Amazon. In all of 2018, stores closed 5,864 stores. There have been over 1,000 more closures in 2019 and the year is only half over.
Deborah Weinswig, founder and CEO of Coresight, stated to CNBC, “I expect store closures to accelerate in 2019, hitting some 12,000 by year end.”
The newest strategy malls are attempting is to bring in more customization-focused digital retailers like suit company Indochino, glasses maker Warby Parker and mattress retailer Casper.
The adversity has been tough for mall owners as of late with no end in sight. All innovative strategies seem to be in play to keep the brick and mortar shopping experience afloat for years to come.