Urban Malls Recapture Momentum Lost to Suburban Retail Centers

Analysis of consumer data suggests that urban and suburban malls can continue to coexist as they recover from the effect the Covid pandemic had on shopping patterns. “Foot traffic data indicates that there is plenty of room in the retail space for both types of venues,” according to a report by Placer.ai.

While urban malls tend to complement existing commercial offerings and offer consumers in a given area multiple retail choices, suburban shopping malls are often the primary shopping destinations for surrounding communities, the report noted.

Data from 2018 and 2019 show that, pre-pandemic, urban shopping centers outperformed those in the suburbs in the months between January and October. But during the busy November and December shopping season suburban centers saw a larger spike in visits.

After Covid, the pattern has changed. Since mid-2020, suburban mall traffic has caught up with traffic to urban malls during the January-October period, while still beating city locations over the holiday season. This could be due to hybrid work and work-from-home trends that encourage consumers to stay closer to home. It could also be due to the migration of new residents to suburban areas during Covid and to local shopping, the report noted.

Nevertheless, since the start of 2023, year-over-year data on retail foot traffic reveals that urban shopping centers have fared better than suburban ones, the report found. In January 2023, visits to urban centers rose 6.5% compared to January 2022, while suburban centers rose just 3.2%. In the period February to May 2023, the percentage of visits to both types of malls fell compared to the prior year, but more steeply each month for suburban malls than for urban centers.

The report speculated that these findings could be due to the fact that urban centers started from a lower baseline, or that consumers in urban centers earn more and are more resilient to inflation. It could also indicate that the exodus from cities during the pandemic is over and that more affordable metro areas are becoming vibrant commercial and employment hubs.