Even before the pandemic, many US malls were in decline. Years of developers overbuilding shopping centers resulted in a bubble of retail space that ultimately burst. While high-end malls filled with activities and restaurants still draw visitors, the rest often struggle to lure shoppers as their stores lose relevance and US consumers buy more online.
Now Covid-19 is increasing the pain. With stores closed and shoppers slashing discretionary spending, a large share of mall tenants are already failing to pay their rents. But even after the immediate crisis subsides, the pandemic is likely to spur a wave of store closures among retailers. Companies currently suffering include some of the biggest mall tenants in the US, many of them serving as important anchors in shopping centers around the country. Their struggles are only set to accelerate the demise of many malls.
Those stores that remain could see their visitors fall even further as shoppers avoid venturing into crowded indoor spaces if they don’t have to. Respondents to one small survey of more than 500 US consumers by First Insight, a retail predictive analytics firm, ranked shopping malls and department stores as the retail spaces they felt least safe shopping in as stores reopen, for instance. They felt more secure in grocery stores, big box stores, drug store chains, and even small local businesses.