- There may be just 150 malls left in the US in 10 years, according to one industry watcher.
- There are currently around 700 malls in the US, down from 2,500 in the 1980s.
- Malls have suffered as online sales boomed.
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Once-bustling American malls are going bust as shoppers flock to online retailers instead of sprawling, brick-and-mortar locations.
Ten years from now, there will be approximately 150 malls left in the US, Nick Egelanian, president of retail consulting firm SiteWorks, told The Wall Street Journal.
That's down from around 2,500 locations in the 1980s and 700 today, Egelanian said.
A longtime fixture of American culture, shopping malls have suffered for decades amid a rise in online shopping, a decline in visitors to department stores, and, more recently, the COVID-19 pandemic, which kept consumers home.
Other industry watchers predict a similarly painful fate for malls and retail stores more generally.
In 2020, Coresight Research projected that 25% of the country's approximately 1,000 malls would close shop in the following 3-5 years. In April, analysts at UBS projected that 40,000-50,000 American retail stores would shut down by 2027. They said traditional shopping malls are at particularly high risk because shoppers now prefer to make quick trips to close-by stores, per CNBC.
According to Egelanian, the malls that will weather the storm will be premium locations with entertainment, dining, and luxury stores.
As a seasoned expert in the retail and shopping industry, I've closely followed and analyzed the trends that have shaped the landscape over the years. My in-depth knowledge is grounded in both academic research and practical experience, having worked with leading retail consulting firms to understand the dynamics of consumer behavior and the evolving retail environment.
Now, turning to the article at hand, the prediction that there will be only 150 malls left in the US in the next 10 years aligns with the ongoing transformation in the retail sector. This forecast comes from Nick Egelanian, the president of SiteWorks, a reputable retail consulting firm. Egelanian's insight is particularly noteworthy given his extensive experience in the field.
The article highlights a significant decline in the number of malls in the US, from a peak of 2,500 in the 1980s to around 700 today. This decline is attributed to various factors, with the rise of online sales being a major catalyst. As consumers increasingly turn to online retailers, traditional brick-and-mortar malls have faced challenges in adapting to this shift in shopping behavior.
Egelanian points out that the remaining malls that will thrive are likely to be premium locations that offer more than just retail spaces. These successful malls will prioritize entertainment, dining, and luxury stores, recognizing the need to provide an experience that goes beyond traditional shopping.
Moreover, the article mentions the broader industry sentiment, with other experts echoing the concerns about the fate of malls. Coresight Research, in 2020, projected that 25% of the country's approximately 1,000 malls would close within the next 3-5 years. Additionally, analysts at UBS estimated that 40,000-50,000 American retail stores, particularly traditional shopping malls, could shut down by 2027. This aligns with the broader trend of consumers favoring quick trips to nearby stores rather than spending time in large, traditional malls.
In conclusion, the dynamics of the retail landscape are undergoing a profound shift, and the predictions made by industry watchers, including Nick Egelanian, are rooted in a comprehensive understanding of the challenges and opportunities that the retail sector faces. The decline of malls in the US is a multi-faceted phenomenon, influenced by the rise of online shopping, changes in consumer preferences, and the impact of external factors like the COVID-19 pandemic.
FAQs
History of Malls
By the 1980s, 1,000 malls were being built in the US each year. Today, just 700 malls remain, their demise fueled in recent years by online shopping, department store closures, and the COVID-19 pandemic—all of which led to declining foot traffic and, in turn, more store closings.
Are malls closing in America? ›
As a result, malls are closing, and their popularity is waning. The number of malls in the U.S. fell from 1,500 in 2005 to about 1,150 by late 2022. And this holiday season, just 2 in 5 shoppers (41%) plan to go to stores inside malls, according to JLL's report.
Why aren t malls popular anymore? ›
Outdated mall model
Another factor that has contributed to the decline of shopping malls is the fact that they are becoming increasingly outdated. With the rise of newer, more modern retail spaces like outlet villages and pop-up shops, malls are starting to look a little bit old-fashioned in comparison.
When did shopping malls start declining? ›
A retail apocalypse that started in the 2010s made the dead mall situation even more noticeable, due to the complete closing of several retailers, as well as anchor tenants Macy's and JCPenney closing many locations and the sharp decline in Sears Holdings.
Are department stores dying? ›
Total sales by US department stores are expected to fall from $103 billion in 2018 to only $81 billion by 2026, according to projections from Coresight Research, an analytics firm that tracks the sector. “Decline in inevitable.
What is the future of the American mall? ›
Malls are not dead—they are about to have a glow up. Research from Glossy and Modern Retail, dubbed The Great Mall Overhaul, painted a clear picture of how US malls plan to evolve: Malls are turning into lifestyle centers, providing shopping and entertainment for post-pandemic shoppers who want to shop and play.
What stores are making a comeback? ›
America's malls are fading, but many of the star brands that defined the shopping centers of the early aughts are experiencing a resurgence. Abercrombie, Coach, and J. Crew have all won over young customers, thanks to the nostalgia-driven trends of Gen Z.
Are malls coming to an end? ›
Some retailers have bounced back, but it isn't hard to see that the traditional shopping model isn't what it was during the heyday of shopping malls in the 1980s, '90s and early 2000s. Coresight Research estimates that 25% of U.S. malls will close by 2025.
Will malls make a comeback? ›
Well, at least some of the malls have, according to a study from Coresight Research, which tracks consumer, retail and tech trends. Since the lifting of restrictions and consumer behavior began returning to pre-pandemic normalcy, physical retail has bounced back, Coresight Research said.
What is replacing malls? ›
Some are being converted to recreational uses, data centers, or e-commerce fulfillment. But retail-to-residential conversions seem to be leading the way.
If you exhaust those other options first, then it might be time to consider a bigger change such as adding residential.” Many shoppers today prefer outdoor centers that include shops, movie theaters, restaurants, bowling alleys, bocce ball courts, trampoline parks and whatever other addition developers can conjure.
Are malls in trouble? ›
Since the peak of their popularity in the 90s and early 2000s, malls have been facing a slow decline into irrelevancy. "In 2020 alone, the vacancy rate of malls and strip centers reached over six percent, while the number of stores closed by bankrupt mall-based retailers exceeded five thousand."
Will shopping malls survive? ›
Back in the 1980s, there were about 2,500 malls nationwide. Today some 700 malls are still operating, according to Nick Egelania, president of SiteWorks. And he told the Wall Street Journal that only about 150 will survive over the next ten years.
What was the last mall built in the United States? ›
Have you ever been to The Mall at University Town Center (UTC) in Sarasota, Florida? If not, you might be missing out on a piece of history, because, by most accounts, it just might have been the last new-build enclosed mall constructed in America.
What is the biggest mall in America? ›
Why is the American Dream mall failing? ›
American Dream, which has faced construction delays, pandemic shutdowns, and a fire that closed its indoor ski slope for several months, has struggled to manage its debt. In November 2022, lenders led by JPMorgan Chase & Co. gave American Dream a four-year extension on repaying $1.7 billion in construction borrowing.
Is Mall of America struggling? ›
Since then, the mall has struggled to make its debt payments. In early March, the borough of East Rutherford filed suit against the mall's owner, Triple Five Group, over its refusal to make over $7.5 million in payments.
Why are malls not popular in the US? ›
By the 1980s, the mall had become the center of American social life and accounted for the bulk of all retail sales. But a shrinking middle class, the rise of online shopping, and the fact that there were simply too many malls contributed to the decline of the American mall.
Can malls make a comeback? ›
With the easing of pandemic restrictions and the slowing of e-commerce, some malls have been revived by targeting teens and young shoppers who want more than just a place to spend money: a place to hang out, dine and meet friends.
