Mall Visits Declined In September, Interrupting Sector’s Recovery
“This 'artificial' July boost was clearly beneficial to retail, even if it made the sector appear somewhat ahead of where it really was.”
Visits to top tier malls continued to decline off July highs last month, with traffic to indoor malls down 6.5% over September 2019 and visits to outdoor malls down 5.% over the same period.
The decline marks a continued interruption in the steady recovery the sector had enjoyed since the beginning of the year, which was driven by pent-up demand, the lifting of various COVID-related restrictions and the back-to-school shopping season.
“Rising COVID cases and the end of the unique confluence of factors that drove the summer visit surge all came together to expand the visit gap,” says Placer.ai’s Ethan Chernofsky in a recent analysis of the firm’s data.
But there are reasons to be hopeful: “The summer in general and July in particular benefited from a very unique mix of factors that boosted mall visits in the short term. The end of that unique mix was inevitable and the resulting decline in visits was therefore something that could be expected. This ‘artificial’ July boost was clearly beneficial to retail, even if it made the sector appear somewhat ahead of where it really was,” he says.
“In addition, while visit gaps returned in August and September, they were still smaller than those seen in May and June, indicating that the wider retail situation is still in strong shape relative to where it was just a few months ago,” Chernofsky says. “And all this in the face of the Delta variant, a continued lack of business travel and ongoing visit declines in major urban areas.”
Malls’ true trade areas—which refers to how far shoppers are willing to travel to visit a certain location—have been approaching pre-pandemic levels since this summer.
“As customers are willing to drive further if it means visiting a ‘better’ shopping centers, malls will need to step up their offerings if they wish to stay in the game and continue to attract customers who are increasing expecting their malls to provide not just shopping, but also a diverse array of dining options, entertainment choices, and services,” Placer.ai’s Shira Petrack said.