Shopping Malls? Dead Malls?

“Right now, ladies and gentlemen….”

I believe we’re seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate. Online retailers are relentlessly gaining share in many retail categories, and offline players are fighting for progressively smaller pieces of the retail pie. A number of physical retailers have already succumbed to online competition including Circuit City, Borders, CompUSA, Tower Records and Blockbuster, and many others are showing signs of serious economic distress. These mall and shopping center stalwarts are closing stores by the thousands, and there are few large physical chains opening stores to take their place. Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.
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A report from Co-Star observes that there are more than 200 malls with over 250,000 square feet that have vacancy rates of 35 percent or higher, a “clear marker for shopping center distress.” These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.

The Death of the American Shopping Mall

It’s all the fault of … shopping malls! (These days it’s WalMart’s fault. Check.) It’s not clear how evil business has so much control over our lives and how angelic government (e.g., Nanny Bloomberg) so little. There oughta be a law! Rubes.

Speaking as someone who has never enjoyed shopping online shopping is a boon. Far larger selection, more competition with tons of price comparison, shopping any time at any hour of of day, any day of the week, and on holidays. That’s great. Love it. I go months without stepping foot inside a bricks and mortar shopping center. What I still buy in person: food and gasoline. Occasional trips to a drug store for chocolate or liquor.

What’s interesting about the migration to online buying: people getting more stuff shipped to them is only part of the story. Whole categories of goods have gone virtual and, in the process, their new forms destroy the demand for other physical goods. Take ebooks. They also destroy demand for book shelves. You don’t need lots of bookshelves to hold your Kindle or Nook books. You also do not need shelves to hold records, cassette tapes, or VCR tapes.

Bye Bye Shopping Malls Due To Online Buying

deadmalls DOT com – “Welcome to retail history!”
Dead mall – Wikipedia

The only people who think of shopping malls as “sacred places” are professors, documentary film makers, elitists (but I repeat myself), and tweens and teens. Why can’t we obey our betters? And what is it with objecting to WalMart and not Amazon hurting small businesses? Amazon is hurting small businesses. Why does no one object and boycott Amazon? Rubes.

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