“An average of 1,170 shopping malls closed every year between 2017 and 2022” (“Shopping Mall Closure Statistics (2023): Are Malls Dying?”). Shopping malls have been decreasing in popularity since about ten years ago. There are many contributing factors to the decline of malls, but some stand out more than others. Online shopping, high rent prices, and fast fashion are some of the main reasons for foot traffic decline for these once-popular shopping centers.
Many department stores used to be anchors in malls. Now that fast fashion and cheap clothing alternatives have risen in popularity, many consumers lean towards stores like Target to get what they need. “But department stores, which have long prided themselves as the purveyors of affordable American fashion, have been struggling for decades now, as consumers flock to Target Corporation (TGT) and H&M for cheap chic and to Amazon Inc. (AMZN)” (Lee). Department stores are no longer a staple for shopping; many consumers are using other means to buy their clothing. If these department stores aren’t getting enough foot traffic, they will not make enough money to stay open.
The overhead cost of keeping malls open is extremely high. “The average commercial rental in a Kansas City strip mall is $1,200 per month. This price can vary depending on the size of the space and the location of the strip mall” (“The Average Commercial Rental In A Kansas City Strip Mall”). Stores in malls do not get enough foot traffic to keep up with the substantially high rent prices. It’s easier just to set up a website on Etsy or Shopify.
Online shopping has had a big impact on the state of malls. Online shopping substantially grows as technology advances. “Amazon has 310 million active users as of 2023” (Mosby). If people use online shopping websites instead of shopping in a building, the building will not make enough revenue to keep itself open compared to its online competitors. “In the second quarter of 2023, Amazon generated $134.4 billion in revenue, which was $7 billion more than in the first quarter of 2023” (Mosby). Not only do people shop online, but they also use the internet for entertainment. “In the third quarter of 2023, Netflix generated total revenue of nearly 8.54 billion U.S. dollars, up from about 7.93 billion in the corresponding quarter of 2022” (Stoll). This is higher than its movie theater counterpart AMC whose “Revenue in the quarter ending September 30, 2023 was $1.41B” (“AMC Revenue 2012-2023”).
All of these factors have a huge impact on the stability of the American shopping mall. High rent prices, online shopping, and fast fashion are big competitors to the mall and its anchor stores. More than 1,000 malls close each year because they need help to keep up with up-and-coming shopping and clothing trends that other companies adapt to, to keep their consumers intrigued and buying their products. Malls can lower rent prices, keep up with trends, and try online shopping options to stay in business so the American shopping mall doesn’t completely crumble.
Works Cited
“AMC Revenue 2012-2023.” Stock Analysis, https://stockanalysis.com/stocks/amc/revenue/. Accessed 27 November 2023.
“The Average Commercial Rental In A Kansas City Strip Mall.” Denver Mart, 4 December 2022, https://www.denvermart.com/the-average-commercial-rental-in-a-kansas-city-strip-mall/#google_vignette. Accessed 27 November 2023.
Lee, Thomas. “Here’s The Real Reason Why Downtown Malls Are Closing (It’s Not Crime).” TheStreet, 15 June 2023, https://www.thestreet.com/retailers/heres-the-real-reason-why-downtown-malls-are-closing-its-not-crime. Accessed 17 November 2023.
Mosby, Albert. “102+ Amazon Statistics 2023 (Users, Facts & Trends).” Yaguara, https://www.yaguara.co/amazon-statistics/. Accessed 27 November 2023.
“Shopping Mall Closure Statistics (2023): Are Malls Dying?” Capital One Shopping, 7 June 2023, https://capitaloneshopping.com/research/mall-closure-statistics/. Accessed 27 November 2023.
Stoll, Julia. “Netflix: quarterly revenue 2023.” Statista, 19 October 2023, https://www.statista.com/statistics/273883/netflixs-quarterly-revenue/. Accessed 27 November 2023.
Valensky, Lauren. “Why Are Shopping Malls Dying, and How Can They Make a Comeback?” Epos Now, 27 July 2023, https://www.eposnow.com/us/resources/why-are-shopping-malls-dying/. Accessed 17 November 2023.
