Long before the coronavirus even shifted to online shopping, the conversation about how malls “die” started. Back in the 1990s, some analysts had been asserting why mega-malls tailored for urban sprawl were doomed.
Shopping mall visits continue to fluctuate
The reasons are complex, depending on who you ask, everything that can be attributed to the rise of Amazon (AMZN) – Get Amazon.com Inc. Report Shift millennials’ priorities. But lately, there’s another factor you can blame: inflation.
According to Placer.ai’s most recent mall index, visits to outlet malls fell 6.7% year-on-year in June. While visitors to indoor malls and open-air centres rose 1.5% and 0.5%, respectively, that was a far cry from February’s 25.7% and 28.7% increases.
“This view becomes clearer when looking at visits compared to the same period before the pandemic,” wrote the Placer.ai report. “From this perspective, indoor shopping mall visits declined. 9.5 per cent, open-air lifestyle visits were down 9.4 per cent and outlet malls were down 14.3 per cent.”
While the study didn’t delve into cause and effect, at least part of the story may lie in price increases. The national average gasoline price of $4.8 a gallon is now significantly higher than a year ago at $3.134.
Go to the mall and spend money you don’t have
In response to rising costs, many Americans have been cutting back on non-essential travel. According to a recent survey by Autoinsurance.com, 45% of drivers said they had reduced the number and length of their trips, while 31% had cut costs in other areas to compensate for higher gas prices.
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For those struggling with rising prices, rambling aimlessly as a teenager may have become a sign of extravagance. There is also a perennial problem of rising prices – the consumer price index rose 5.8% in June 2022, and the average cost of clothing is now more than 6% higher than last year.
All of this helps create a situation where the mall experience is more frustrating than pleasant for many, especially those earning less than the average in their area people.
Traffic at open-air centres increased by 6.2%, and at indoor malls by 4.1%. By June, those numbers were down 2.4% and 3.7%, respectively.
“The widening decline illustrates the cumulative impact of inflation and gasoline prices on consumer visits,” the report reads. “Critically, this does not necessarily mean a decline in purchases, as it may simply drive a A more efficient shopping experience, where travelers expect to accomplish more with each visit—the return of mission-driven shopping.”
As Placer.ai points out, it’s also not correct to start shouting that malls are dead, as these numbers tend to fluctuate with different historical and social trends – many are currently being converted into entertainment centers, and people may Will start going to indoor malls more often as the weather gets colder.
While inflation shows no signs of abating, many are still hoping for an improvement.
“Inflation and high oil prices have had a major impact on the wider retail environment, with traffic taking a major hit,” the report reads.