The rise of online shopping and changing attitudes among millennials are some of the chief reasons that a third of American shopping malls may close in the near future, says a retail analyst.
On the heels of department store behemoth Macy’s reporting of a 7.4 percent plunge in revenue for the first quarter of 2016, financial consultant and retail analyst Jan Kniffen told CNBC that falling sales at anchor stores like Macy’s and JCPenney likely spell doom for a good portion of shopping malls.
If you look into the future, not that far,” he said on the business program Squawk Box, “we’ve got 1,100 enclosed malls in America. We probably need 700.”
Even among the malls that survive the coming years, Kniffen predicts that only about 250 will thrive while the rest struggle to keep their doors open.
Currently, the U.S. has an estimated 48 square feet of retail space per citizen — by far the most on the planet. By comparison, the U.K. — who comes in at number two — has roughly half the retail space per person.
The bottom line, according to Kniffen, is that America is “the most over-stored place in the world.”
Macy’s poor earnings report comes after a dismal holiday shopping season for the retailer — so bad, in fact, that the company cut 4,800 jobs almost immediately after Christmas.
But Macy’s — the nation’s largest department store chain — is far from alone in its profit woes.
JCPenney closed 40 of their 1,060 stores in 2015, leaving 2,250 people out of work. This, after posting devastating losses in 2013.
Kmart, once one of America’s largest retailers, has seen its sales drop a devastating 67 percent since 2000. At that time, Kmart had nearly 2,200 stores nationwide. Now it has less than 1,000.
Gap, another staple of the American shopping mall, announced in late April that it would be shuttering 175 stores after sales dropped an additional 3 percent in March — marking the 23rd straight month without revenue growth.
Sadly, the list goes on — across multiple sectors of the retail economy.
But with shopping malls specifically, the disappearance of anchor stores means bad news for all, even those stores that are turning a profit. This is because anchor stores like Macy’s bring in heavy foot traffic. And to get to the department stores, shoppers have to walk by, and possibly patronize, outlets they may not have otherwise.
One of the main culprits behind the steady decline of brick-and-mortar department stores is the Internet. More and more, people are going online to satisfy their shopping needs.
But there other major determining factors as well, such as the changing ideas among young people about owning “things.” A 2014 report sponsored by event management company, Eventbrite, outlined a growing trend with millennials — they value experiences over objects.
“For this group,” says the report, “happiness isn’t as focused on possessions or career status. Living a meaningful, happy life is about creating, sharing and capturing memories earned through experiences that span the spectrum of life’s opportunities.”
For these reasons, among others, many analysts are predicting that shopping malls — once an icon of a robust American economy — may soon be a thing of the past.
As BBC’s Jonathan Glancey observed:
The mall became a place to hang out as well as to shop, a central part of contemporary U.S. culture and a model for the rest of a world keen on emulating an American way of life.
This article (Americans Are Ditching Shopping Malls Because They Want Less ‘Things’) is free and open source. You have permission to republish this article under a Creative Commons license with attribution to James Holbrooks and UndergroundReporter.org. If you spot a typo, please email the error and the name of the article to [email protected]. Image credit: Flickr/Nicholas Eckhart
Who needs to go to a social engineering place loaded with cameras and idiots?
Bingo! It’s no longer safe to be in large crowds…from both sides of the law!
I disagree; the reason that malls are dying is because we have no excess money to spend frivolously. Who wants to walk around looking at goods that are beyond our reach? It’s easy to say, “I’m not interested in ‘stuff’.” It’s much harder to say, “I can’t afford it because I cannot find a job.”
In the past when I needed clothes, I’d enjoy going in & out of stores and looking through their inventory. Now I find all shopping stressful, because I know I can’t afford to buy anything even if I desperately need it. One dollar towards new pants is one dollar less I’ll eat with or pay my car repair with. In 2015, 51% of all Americans lived on at least one entitlement program whether social security, unemployment, or food stamps, etc..(of course they’ve cut food stamps for single adults since then). 41% of working age Americans either do not have job or only work less than 90 days a year. Who can afford to go to the Mall Anymore!!!
Agree: younger folks are deep in debt because many want everything new (young folks in my day got hand me down stuff and were glad to get it). It’s some of over fifty crowd and especially the over 65 crowd who are downsizing and only replacing broken appliances or furniture as needed. They don’t want to burden their heirs (like I was burdened years back) plus many un cluttering websites like Marie Kondo is motivating people to cut down on clothing, linens, books, memorabilia, paper clutter and other household un used stuff that’s taking up space. they realize after donating and doling out stuff to family, they need to stay pared down and quit buying. K mart is useless, zero customer service and lots of low end junk. (used to have nicer stuff) Hope they go under. Kohl’s is iffy, as their prices are too high for a mid range dept store.
yep no new cars when I was a teen…you got an OLD one and fixed it up
This hits the nail on the head
People aren’t going to Malls any longer because there are mobs of black teenagers who terrorize the place.
… and mexicans…
Nope, it’s because there are too many people wanting your money and delivering nothing worth while.
Don’t worry, they will in all probability convert them all into FEMA concentration camps…like they are doing the closed for repairs Walmarts!!!!!!!!!!!!!!!
How about “fewer” things?
Agree, listen up retirees, start purging your stuff others don’t want, donate to group homes, animal shelters, and charities in your city. My house seems double in size in sometime, since downsizing.. It takes time and is ongoing. A cleaner house beats clutter. Don’t leave stuff you don’t need for the heirs to clean up. Don’t forget the garage and shed either.
Please stop flaunting your basic literacy. You might hurt someone’s feewings.
Just like your gender identity, use words the way you feel
“Less” is acceptable for quantity, in post-modern English; sorry Sherlock. Be glad the writer isn’t peppering the article with hashtags.
When places like JCPenney’s & Sears, “Target” homosexuals, shhemales, etc. as well as carry a Kardashian clothing line, they deserve to go out of business.
“happiness isn’t as focused on possessions or career status. Living a meaningful, happy life is about creating, sharing and capturing memories earned through experiences that span the spectrum of life’s opportunities.”…i.e., I’m broke.
TOO much cheap useless products from China. Overwhelmed with CRAP.
Another reason for the decline in shopping mall sales has been omitted. It is tax policy.
Look at the shopping mall parking lots – many are still full.
Why would anyone in their right mind create a system where you can go to the mall, browse the merchandise displayed at Macy’s and determine what you want to buy, then go home and buy it on Amazon and pay no sales tax?
This policy is also destroying the Mom and Pop stores who can’t compete with the free shipping of the Amazons. When they are done, because this is all happening by design, no one will be independently working for themselves and more jobs will be gone. You will only be able to buy items that the “state” approves and more people will be dependent on the state handouts to survive.
(And yes we are taxed to death. But when they create an un-level playing field – look for the reason. Its like the Food Modernization Act. Created to put the last nail in the coffin of independent farmers.)
The kids have been indoctrinated to say things like “creating and sharing”, but when you examine closely – most don’t live that way. Credit is still flowing. Still “no money down loans” being handed out for houses. Still high credit card limits for people without jobs and assets. After parents invest $100K-$200K for that stupid college education – they double down and send them to graduate school since they can’t get a job – adding to the debt. So the kids are defaulting at record rates on their tuition loans and have no decent job prospects, and parents have no savings and/or assets as they approach retirement since they re-financed that home to pay for these college experiences. All soon to become debt slaves. All by design.
Very sad consequences with reasonable, true arguments.
I don’t know where you are but I’m a professional shopper, so I cover a lot of malls. Most have almost vacant parking lots 80% of the time. Back in the 1980s, I’d have problems finding parking spaces on weekday afternoons. Now, even on weekends I never have a problem. They have more traffic on weekends, but they don’t equal any weekday in 1984. IMHO part of the problem is that they’ve dimmed the interior lighting to save energy & money, but due to the designs of malls w/o bright light, they are cold & depressing. I now HATE going to most malls… same malls that I loved in the 1980s… & I’ve never been spending my own money so it’s not a matter of being depressed due to my own finances. It’s lighting, it’s poor service, & it’s the fact that all the stores carry mostly the same stuff & none of it is well displayed or enticing. Many stores are in a constant mess with racks crowded too close together & merchandise on the floors & draped over the racks. There were too many mergers. Stores lost their identities, service was cut & nobody who works there gives a damn.
Simply, do not vote!
The parasites have finally sucked so much out of the host that it is dying. Unfortunately for the parasites, they failed to see that when the host dies, they’re not far behind. Hasten the death by spending your money close to home, with small businesses and second-hand shops and Craigslist
American’s have been living beyond their paycheck since the 1980’s by buying an ever growing number of consumer junk items on credit. As far as the decline of the malls, the situation was not sustainable long-term and the malls are showing this with their decline.
At some point the weight of billions of dollars of debt has to be accounted for.