The death of the shopping mall has been predicted ever since customers began to have prominent online options to do their shopping. There is no denying online shopping has cut into the profits of malls, but does that really mean they are on borrowed time?
With the proliferation of COVID, many have said absolutely, feeling the pandemic has without a doubt sped up the clock on the demise of malls. Not all analysts agree with that theory, though.
As stated by Jovan Lee Yuheng for Seeking Alpha, a lot of malls have incontrovertibly been hurt by the financial loss they endured from lockdowns. Yet supposedly those cases don’t indicate the fate of malls as a whole.
When it comes to the King of Prussia Mall owner Simon Property Group, Yuheng notes that they are enduring these trying circumstances pretty well. Yuheng attributes that to Simon’s malls largely being more high quality.
Evidence of this is in the fact that Simon is now reporting that by the third quarter of 2020 that their mall traffic had returned to 90% of what it was prior to the spread of COVID. With there being a growing list of retailers and malls that have filed for bankruptcy after 2020, that really speaks to the longevity that Simon’s malls have.
This lends support to Yuheng’s theory that the current financial challenges don’t spell the end for malls, but merely a culling of malls that were already weak to begin with.
The same article also mentions that by early 2020 that vacancies in malls had reached their highest point of the last two decades, and that report was prior to the impact of COVID which undoubtedly increased that number.
However, if it really is about quality over quantity, then we will simply see fewer malls over time rather than the total disappearance of malls.
Obviously we still have long to go before we see the full effects that COVID will have on malls. Though this contrasting analysis does offer some hope for the long-term health of shopping centers.
Learn more about the data for how malls are faring by reading the article from Seeking Alpha here.