Joel Kotkin argues shopping malls aren’t dead – they’re changing their purpose and targeting wealthier and ethnic consumers.
To be sure, there are hundreds of outmoded malls, long-in-the-tooth complexes most commonly found in working-class suburbs and inner-ring city neighborhoods. Some will never come back. By some estimates, something close to 10 to 15 percent of the country’s estimated 1,000 malls will go out of business over the next decade; many of them are located in areas where budgets have been very tight, with locals tending to shop at “power centers” built around low-end discounters such as Target or Walmart.
But the notion that Americans don’t like malls anymore is misleading. The roughly 400 malls that service more-affluent communities—like those typically anchored by a Bloomingdale’s or Nordstrom—recovered most quickly from the recession, and now appear to be doing quite well.
To suggest malls are dead based on failure in failed places would be like suggesting that the manifest shortcomings of Baltimore or Buffalo means urban centers are not doing well. Like cities, not all malls are alike.
Looking across the entire landscape, it’s clear the mall is transforming itself to meet the needs of a changing society but is hardly in its death throes. Last year, vacancy rates in malls flattened for the first time since the recession. The gains from e-commerce—6.5 percent of sales last year, up from 3.5 percent in 2010—has had an effect, but bricks and mortar still constitutes upwards of 90 percent of sales. There’s still little new construction, roughly one-seventh what it was in 2006, but that’s roughly twice that in 2010.
In other words, shopping malls today can’t afford to try to target everyone at once. Rather, the retail market has both exploded with opportunities and fragmented, meaning that malls and other retailers have to target particular groups. This is going to be easier in areas that have money or lack other retailers or have growing populations.
Of course, Kotkin isn’t particularly worried that shopping malls are taking over the Main Street function for suburbs and other communities. There are issues with this: this is privatized space that often requires a car to get to and its primary activity is consumerism. Indeed, if people focused on activities other than shopping (which remains a very popular activity), our version of capitalism might ground to a halt:
Still, many communities will be happy if shopping malls continue as they are economic boons through sales taxes and jobs.
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