Consumers are Hesitant to Spend But Mall Visits Stay the Same
However, the summer months and especially Back-to-Schools sales could accelerate recovery.
There are a lot of “mays,” “coulds,” and “seems” in an analysis of shopping patterns and the retail mall environment in the month of May by Placer.ai.
The company’s hesitancy about making firm predictions regarding consumer shopping trends reflects not just consumers’ uncertainty over whether to spend or save, but the current unsettled economic environment.
“Although consumers appear to be feeling slightly more optimistic about the economy, savings intentions remain strong – which may be coming at the expense of discretionary spending,” the report noted. “The clothing, footwear, and household goods categories seem particularly impacted.”
The report focused on indoor malls, open-air lifestyle centers, and outlet malls. Gaps in visits to all three mall types increased year-over-year in May. The report speculated this could be due to consumers delaying large purchases in the hope that prices will drop or interest rates ease, and shifting spending to services.
At the same time, month-over-month mall visits remained mostly positive or flat over the past three months, which could indicate that trends are not getting worse.
The report identified a trend toward “mission-driven shopping,” with all three mall types seeing a boost in median visit length relative to the previous May. This “could mean” that consumers are visiting less often but doing more shopping or dining when they do. “The quality of visits may be increasing even as the quantity of visits stagnates,” the report stated.
All three categories of mall experienced traffic surges during sales events like Memorial Day or St. Patrick’s Day. The biggest beneficiaries, however, have been outlet malls, especially during Memorial Day. Visits to outlet malls rose 51% in the week May 22-28 compared to a January 30 – February 5 baseline, as shoppers appeared to prioritize value. Visits to indoor malls also increased — up 14.6% — and open-air lifestyle centers – up 19.8%.
The summer months and especially Back-to-Schools sales could accelerate mall recovery, the report noted.