Outlet Mall Traffic Improves in Third Quarter

Outlet mall foot traffic has improved significantly since the spring season. According to data from Placer.ai, outlet mall foot traffic was down to 26.9% in August and 12.8% in September compared to pre-pandemic traffic levels. The report looked at 11 outlet malls in New York, Texas, California and Illinois.

Weekly data supports the trend that foot traffic is improving in this retail segment. At the end of September, foot traffic had returned to its best levels since 2019 in all of the assets Placer.ai analyzed. For the asset class as a whole, weekly year-over-year traffic is down 9.3%. That is 3.3% closer to normal or pre-pandemic traffic activity, according to the research platform, than the week prior when visits were 12.6% down.

While the overall foot traffic trends are positive, some geographic regions are outperforming others. Grove City Premium Outlets and The Crossings Outlets in Pennsylvania, for example, had the strongest trends in traffic patterns. Grove City in particular had a 9.9% improvement in foot traffic compared to 2019. Crossing Outlets also did well, with traffic up 2.9% in September compared to 2019 numbers. This was especially true at the end of the third quarter when traffic increased by 3.1% in September.

As a result, Pennsylvania outperformed larger markets like Texas and California. Placer.ai notes in its research that Pennsylvania did not have the resurgence of the virus like Texas and California did. However, the two markets also showed recovery, just at a slower pace. In Texas, year-over-year foot traffic was down 27.9%, an improvement compared to the spring, with San Marcos Outlets down 0.3% year-over-year and Houston Premium Outlets up 6.4% compared to 2019.

Most impressively, outlet malls outperformed against indoor and outdoor malls. In the final week of September, visits to outdoor malls were down 23.6% and visits to indoor malls were down 33.2% year-over-year. Outlet malls were down only 9.3% for the same week.

This data shows that outlet malls are well positioned for recovery. The value proposition is the main advantage for these malls, and through the market dislocation, many people are looking for a bargain. In addition, a lot of outlet malls are outdoors, creating a secondary advantage for these assets.

Placer.ai has been closely following retail foot traffic, and in a recent report, the research company recommended that retailers leverage direct-to-consumer goods model to help capture more foot traffic. This is a similar strategy that Neighborhood Goods uses. This model could also help to fulfill consumer demand through the pandemic.