“The malls They are dying,” says Joseph, a 32-year-old who has been working as a clerk in a department store on the outskirts of Washington for the last three years.
This is how this seller summarizes a phenomenon that can end one of the pillars of American culture, shopping malls.
Their number has dropped from 2,500 in the United States in the 1980s to about 1,000 in 2021. and its decline is so steep that it is expected that within 15 years there will only be 150 left in the countryexplains to EFE the president of the consulting firm SiteWorks, Nick Egelanian.
The malls in the US they are dying
According to a Gitnux report, in 2019 some 9,300 stores in the ‘malls’ closed in the United States.
In fact, Joseph, a clerk at Tysons Corner – one of the few large shopping centers left on the outskirts of the capital – believes that his work will “disappear” in a few years, as will these complexes.
Walking around Tysons Corner on a weekday morning it’s easy to see shops with no customers. Many of them opt for restaurants and food stalls instead of shopping, one of the strategies that shopping centers have promoted to continue attracting visitors.
“We come more to eat than buy“, say Cece and Britney, about 30 years old.
For her part, Grace, 61, admits to EFE that she likes to do her shopping physically and goes to this department store once a week. However, she says that her children between the ages of 20 and 30 no longer accompany her, since “They buy everything ‘online’”.
In the opinion of Egelanian, who has been tracking the evolution of department stores in the US for more than a quarter of a century, there is no possibility of “altering the course” of their disappearance, something paradoxical since “they were not built to die and are physically and legally hard to kill.
According to the analyst, even Tysons Corner “will probably get smaller over time”, as has happened in other cases, but it will continue to survive.
The so-called American “mall” has been one of the foundations for the development of society in the country for decades.
The US has the largest retail area per capita in the world: about 25 square feet, equivalent to more than 2 square meters per person, compared to Spain and most European countries, which do not reach half a square meter, about 4.5 square feet. According to the Mexican magazine Real Estate Market, in Mexico that indicator is only 0.11148 square meters.
“We have more stores and freer prices than anywhere else. There are so many discount stores that the department store cost structure no longer makes sense,” Egelanian details.
And it is that the origin of this debacle starts, against all odds, with discounts. In its original 1960s form, malls had no price competition, since discounts were not allowed. It was as a result of the case “United States v. Parke, Davis & Co.” in the Supreme Court that merchants were able to start cutting prices.
This led to more discount stores, and the department store model “became pretty outdated,” Egelanian says.
For this reason, luxury brands “they are doing well“, as well as centers focused on consumers with less purchasing power. “The worst place to be is in the middle and most of the shopping centers are there,” says the analyst.
Some malls will survive
Faced with a possible extinction, the director of the Global Data consultancy, Neil Saunders, points out to EFE that “there will undoubtedly be more closures, but some will survive and continue to function well.”
“Shopping habits have changed: now we buy more online and we buy more in our area,” recalls Saunders, who in turn believes that there are “too many malls in the US relative to demand.”
You just have to look at the location strategies of retailers, something that has given rise to “neighborhood shopping centers,” Saunders says. Many stores are following the pattern of abandoning malls in the heart of cities and moving to the outskirts, with smaller outlets in residential neighborhoods.
In fact, the number of clothing stores is growing, but today they are located individually in the suburbs instead of inside shopping centers. In 2022, although the garment sector closed 750 stores in total, it recorded the second-highest number of openings, a total of 1,395, indicates an analysis by Coresight Research. Many of them settled in the suburbs.
Every time a TJMaxx, Marshalls – popular outlet chains in the US – or an H&M store opens next door, it is “another cutback in department stores,” Egelanian admits.
The question is whether the malls will be able to “adapt to what consumers want,” says Saunders. “After all, the vast majority of sales are made in physical stores, so the spending is there and the malls just have to be able to capture it,” he concludes.
And in Mexico, how are the shopping centers doing?
While the US market for shopping centers is in decline, in Mexico, on the contrary, it is on the rise and is positioned as the number 1 market in Latin America.
According to an analysis by Pogen, In Mexico there were 863 shopping centers in 2021which add up to approximately 25.3 million square meters of rentable area.
These figures are much higher than those of other Latin American markets, such as Brazil, which has 620 shopping centers; and Chile, with 183.
After the pandemic halted several construction projects, the opening of shopping malls in the country has resumed. For example, him Fibra Uno Mítikah Project added 120,000 square meters with 280 spaces commercial in Mexico City.
In addition, consumer attendance at shopping centers in Mexico continues to recover after the pandemic. In the first quarter of 2023, the influx to the commercial centers in the country increased 15% with respect to the same period of the previous yearaccording to the Pogen index.
While the stores in shopping centers grew 16% against the same quarter of 2022.
“In general, the performance of the quarter was positive with marked growth and reaching 90% average recovery against pre-pandemic levels,” said Mauricio Navarro, CEO of Pogen.
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