Reduced tourism and constrained discretionary spending are weighing on downtown retail activity, while malls benefit from late-season holiday demand, according to MRI Software.
Mall foot traffic climbed 22.6% month-over-month in December, stabilizing briefly after Thanksgiving before rising 13.3% week-over-week in the week before Christmas and 10.3% during Christmas week. MRI said malls stood out across the retail sector, fueled by last-minute convenience-driven shopping and value-conscious behavior.
The surge underscores malls’ continued appeal as efficient, one-stop shopping destinations, particularly for time- and budget-pressured consumers. Christmas Eve was a critical driver of traffic, especially for procrastinating shoppers.
Meanwhile, downtown retail districts lagged. Foot traffic slipped 0.2% month-over-month and ended December roughly 5% below 2024 levels. Shortfalls ranged from 7.1% the week before Christmas to 2.7% during Christmas week, while evening activity fell 5.8% year-over-year in the final week, reflecting softer tourism and pressure on discretionary spending.
“December's data clearly shows that convenience is the defining factor for U.S shoppers this holiday season. With time and budgets under pressure, consumers gravitated toward malls that offered efficiency, certainty and a true one-stop shopping experience, particularly in the final run-up to Christmas,” said Carla Hinson, vice president of North America Solutions and Innovation at MRI Software.
“Downtown areas, however, continued to feel the effects of softer tourism, reduced evening activity, adverse weather conditions and more cautious discretionary spending.”
Wider economic factors also influenced December performance. The Fed’s December interest rate cut may have modestly boosted consumer confidence, helping fuel the late-season surge in malls, according to MRI Software.
Post-holiday conditions were more mixed. Mall traffic fell 13.4% week-over-week in the final week of December but remained 5.3% higher year-over-year, signaling strong demand for post-Christmas promotions. Downtown foot traffic declined 4% from the previous week, likely due to severe weather in the Midwest and on the East Coast.
The data shows consumers continued spending amid financial constraints, increasingly using buy-now, pay-later options to support purchases.
For retailers and landlords, the divergence highlights where demand is concentrating. Convenience and value remain key drivers of foot traffic, reinforcing malls as resilient retail hubs, said the report.
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