Shakespeare may have turned Richard III’s winter of discontent into glorious summer. But in the modern US, the hazy, lazy, crazy days aren’t being overly kind to mall operators and their tenants, according to data from Placer.ai.
Inflation and high gas prices have hit the general retail landscape hard. Placer analyzed data about “more than 100 top-tier indoor malls, 100 open-air lifestyle centers (not including outlet malls) and 100 outlet malls across the country, in both urban and suburban areas” using anonymized location data from 30 million devices. That may not be statistically representative, but imperfect data can be better than none.
In this case, the data says that malls aren’t shaping up all that well. “Visits for indoor malls continued to outperform the equivalent month from 2021, but the overall strength did wane,” the report said. “Visits were up 1.5% for indoor malls, and 0.5% for open-air lifestyle centers.”
Outlet malls in June received a hard hit: 6.7% year-over-year decline. That paralleled the drop for May. According to the firm, outdoor mall performance shows especially well the impact of gasoline prices. In other times, people might seek them out to save some money. But outlet malls don’t tend to be placed as conveniently as other malls, meaning more driving—and more travel cost—for many consumers.
However, the growth was in comparison to visits “still in the early stages of the post-COVID recovery in June of 2021.” Compare numbers to pre-pandemic levels and the differences are starker. “From this perspective, visits to indoor malls were down 9.5%, open-air lifestyle visits down 9.4% and outlet malls down 14.3%,” the report noted.
For additional context, malls look better than typically high-performing segments, with “superstores, apparel, and grocery … down 5.8%, 3.7% and 6.1% respectively” month over month.
It’s important to remember that visit data is limited in what it can reveal by itself. People might still buy from malls but go less frequently, and so combine their purchasing in fewer trips.
There was some good news, according to Placer.ai. “After seeing visits hit their lowest point the week beginning June 6th from a year-over-three-year (Yo3Y) perspective, traffic has been steadily improving,” the firm said. “Visits beginning the week of June 20th and June 27th were down just 5.3% and 6.8% for indoor malls, and 5.4% and 7.9% for open-air lifestyle centers respectively, bringing them in line with April and May numbers. This positive trend is critical heading into a very important July and August back to school season.”