Published Date : Jul 03, 2014
A recent project conducted in the U.S. has revealed that shopping malls in the country are on a sharp decline. The list of defunct, dying and abandoned malls is increasing year by year.
A dead mall is one with low consumer traffic and high vacancy rate. New York was on the top of the list of states with dead shopping malls at 42. Pennsylvania followed next with 28 and Illinois and Ohio with 27 dead malls. Retail analysts have found that in 1990, 16 million square-feet of mall space had opened up. And since then, building decreased. 2007 was the first year in over four decades when not a single large mall opened in the U.S. Only two new malls have opened in the last eight years and only one major one in 2012.
The primary reason why shopping malls are struggling to thrive is the onset of online shopping. Young adults no longer feel the need to go to a mall to shop. Convenience, greater options and larger discounts offered by online shopping sites appeal to young Americans. E-commerce has soared to newer heights, with sales in the first quarter of 2014 almost USD 71 billion, with an annual rate of nearly USD 300 billion per year. This figure was equal to over 6% of the total retail spending in the U.S. Moreover, a need for earlier generations to go to the mall to socialize has been replaced by social media and networking sites.
A real estate analytics firm has forecast that nearly 15% of the shopping malls will either fail, or be repurposed in the coming 15 years. The only saving grace is that dead malls are surfacing in only those areas where the local economy has been hit by recession. High-end malls that cater to luxury clients are doing well.