12 Reasons Shopping Malls Are Struggling to Survive
Once the heart of American retail, shopping malls are now struggling to survive as online shopping, shifting consumer habits, and failing anchor stores turn them into relics of the past.
- Alyana Aguja
- 4 min read
Now empty centers of social and commercial life, shopping malls are struggling to survive in an e-commerce driven world, shifting consumer patterns, and dwindling anchor stores. Increasing retail vacancies, record operating expenses, and competition from outlet malls and mixed-use properties have further hastened their decline. Without drastic reinvention, many classic malls will end up as hollow shells of a past retail era.
1. The Rise of E-Commerce
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It is no longer necessary to leave one’s home to shop, as giant online stores like Amazon provide quick delivery and low prices. Sears closed more than 300 stores in 2017 after failing to compete with internet-based competitors. As convenience through technology increases, mall traffic keeps plummeting.
2. Department Store Closures
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Malls have traditionally counted on anchor stores such as Macy’s, JCPenney, and Nordstrom to attract shoppers, but a number of these chains are closing. When Bon-Ton filed for bankruptcy in 2018, it resulted in the closing of hundreds of locations, which left malls with huge vacancies. Without these large retailers, smaller retail stores also lose business from fewer shoppers.
3. Shifting Consumer Habits
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Younger generations are moving away from conventional shopping malls towards one-of-a-kind experiences. The growth of mixed-use developments, such as The Domain in Austin, Texas, combines retail with entertainment, dining, and residential areas, making enclosed malls appear out of date. Consumers want more than a place to shop; they desire lively and engaging environments.
4. High Retail Vacancy Rates
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Malls are having trouble filling vacancies after large retail store closures, making them appear vacant and unattractive. For instance, Randall Park Mall in Ohio was the world’s largest mall but experienced so many store closures that it was ultimately demolished in 2014. With fewer stores to shop at, even the remaining stores experience fewer customers.
5. The Death of the American Middle Class
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A declining middle class translates into fewer individuals with the ability to shop in malls as frequently as they used to. Forever 21 went bankrupt in 2019 and decreased consumer spending was a leading reason. As disposable income declines, discretionary shopping is one of the first expenses to be reduced.
6. Inadequately Adapted Mall Redevelopment Initiatives
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A few malls tried reinventing themselves but could not attract the correct crowd. The St. Louis Mills Mall was renamed several times, including an attempt at an outlet mall, but still could not sustain healthy occupancy before closing down permanently in 2019. LSI may happen without a vision and viable plan, and revitalizing a declining mall is hardly ever successful.
7. Retail Crime and Security Issues
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Increased crime rates in some malls have made them less appealing to shoppers and business owners. In 2021, San Francisco’s Westfield Mall experienced a surge in theft and assault, leading Nordstrom to close its flagship store. Shoppers are reluctant to go where it is not safe.
8. The Permanent Impact of the COVID-19 Pandemic
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Lockdowns and health issues sped the downfall of face-to-face shopping, with several stores never recovering. CBL Properties, one of the largest mall owners, declared bankruptcy in 2020 for unpaid rent and dwindling sales alone. Even after restrictions loosened, many consumers continued to maintain their new online buying tendencies.
9. Soaring Rent and Operating Expenses
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Most ailing retailers point to excessive mall rents as an excuse for closures. Payless ShoeSource, in 2017, went bankrupt and closed 400 stores, attributing the closure to high rental costs. With fewer tenants to split the bill, landlords increase the rent for existing stores, creating a cycle of store closures.
10. Over-Reliance on Apparel Stores
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Malls have traditionally relied on apparel retailers, but the impact of shifting fashion tastes and e-commerce competition has battered the industry. Victoria’s Secret shut more than 250 stores in 2020 because it could not adapt to customer tastes. With fewer compelling fashion retailers, malls lose one of their primary attractions.
11. Inability to Compete with Outlet Malls
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Outlet malls provide the same brands at lower prices, luring consumers away from regular malls. For example, the Woodbury Common Premium Outlets in New York draws millions of customers every year, while nearby regular malls have been experiencing falling sales. Bargain hunters like outlets for their perceived value.
12. Aging Infrastructure and Poor Maintenance
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Several aging malls lack modern designs and adequate maintenance, which results in them no longer being desirable destinations. The previously busy Metrocenter Mall in Phoenix, Arizona, experienced waning interest due to its age before it closed in 2020. If a mall lacks that modern and well-maintained look, customers will shop elsewhere.