Talk of how the mall is "dead" has been going on long before covid and even the move to online shopping. Some analysts have been pontificating why large shopping malls tailored toward the urban sprawl are doomed to fail as far back as the 1990s.
Mall Visits Keep Fluctuating
The reasons are convoluted and, depending on whom you ask, can be attributed to everything from the rise of Amazon (AMZN) to shifting millennial priorities. But most recently, there is another you-can-blame-it-all-on-this factor: inflation.
According to the recent mall index from Placer.ai, outlet malls saw a 6.7% decline in visits year-over-year in June. While visitors to indoor malls and open-air centers rose by a respective 1.5% and 0.5%, the growth is a far cry from the 25.7% and 28.7% growth seen in February.
"This perspective comes into sharper view when looking at visits compared to the same period pre-pandemic," reads the Placer.ai report. "From this perspective, visits to indoor malls were down 9.5%, open-air lifestyle visits down 9.4% and outlet malls down 14.3%."
While the study does not delve far into causation, at least part of the picture can lie in rising prices. At an average of $4.8 a gallon nationwide, gas is now significantly higher than the $3.134 seen a year ago.
Going To The Mall To Spend Money You Don't Have
To navigate rising costs, many Americans have been cutting down on any unnecessary trips. According a recent survey by Autoinsurance.com, 45% of drivers said that they've already reduced the amount and length of their trips while 31% cut costs in other areas to compensate for rising gas prices.
For those struggling with rising prices, trips to aimlessly stroll like one once did as a teenager may have already become a sign of extravagance and waste. There is also, perennially, the issue of ever-higher prices -- the consumer price index rose by 5.8% in June 2022 while clothing on average now costs over 6% more than it did last year.
All of this can help create a situation in which malls are more of a depressing than pleasurable experience for many, and those who earn below their area's average in particular.
Foot traffic was up 6.2% at open-air centers and 4.1% at indoor malls. By June, those numbers were down a respective 2.4% and 3.7%.
A 'Cumulative Effect'
"The expanding declines speak to the cumulative impact that inflation and gas prices are having on consumer visits," reads the report. "Critically, this does not necessarily mean a decline in purchasing as it could simply be driving a more efficient shopping experience where visitors look to accomplish more with each visit – a return of mission-driven shopping."
As pointed out by Placer.ai, it is also incorrect to start shouting that the mall is dead because the numbers tend to fluctuate with different historical and social trends -- many are currently being transformed into entertainment centers while people may start going to indoor malls more often as the weather cools.
And while inflation is showing no signs of winding down, many continue to hope for improvements.
"The wider retail landscape has been significantly impacted by the combination of inflation and high gas prices with visits taking a significant hit," reads the report.
