The Wall Street Journal reports that new research from data analytics firm Placer.ai suggests that the summer brought a reprieve for the troubled shopping mall industry.
"In July," the story says, "mall foot traffic surpassed 2019 levels for the first time since the pandemic started, according to data analytics firm Placer.ai. Mall visits overall were up 0.7% from July 2019, led by trips to outdoor malls, which were up 2.1%.
The reason: After 18 months of being essentially locked down because of Covid-19, people were itching to get out … ands then go inside a mall, apparently.
Some context from the Journal story:
"The increase in visits lifted retail sales, helping drive up the share prices of the country’s biggest publicly traded mall owners. Some, such as Macerich Co. and Simon Property Group Inc., are up more than 50% year-to-date, easily surpassing the S&P 500 index’s roughly 19% return for the year.
"The rise in foot traffic is also good news for mall investors who in the early months of the pandemic feared a battering. Justin Kennedy, managing partner of the property lender and investor 3650 REIT, said his firm’s investments in mall-mortgage-backed securities fared better than he initially feared. The company is now looking for more malls to invest in, he said.
"Still, the sector faces fresh challenges in the months ahead. Colder weather often weighs on outdoor shopping centers, while the rise in Covid-19 infections could make more shoppers hesitant to visit indoor malls, analysts said."
- KC's View:
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The thing about this report is that, to be fair, malls weren't exactly in a great place in 2019.
It was in 2018 that MNBN took note of an Axios story about how former JC Penney CEO Mike Ullman disputed projections from some quarters that roughly 25 percent of the nation’s 1,200 malls will close because of online competition and shifting consumer shopping habits. It will, Ullman said, be much worse.
According to the story, “Ullman reversed the numbers, estimating that only about 300 malls will make it. The rest will close over the next five years, becoming victims of decades-long changes in consumer taste, including the recent impact of Amazonization … Ullman said malls must have adequate cash or access to financing to make the transition to a new style of retail, in addition to a location catering to the top income quartile.”
That sounded reasonable to me then, and it sounds reasonable now … especially now that so many malls had to suffer through the hellscape that was the pandemic.
