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Future Of Shopping Malls Essay

1538 words - 7 pages

The current and future of Shopping Malls and Big Box Retail Stores

Michele A. Guinn
Northeastern State University

Abstract
Shopping malls and big box stores appear to be less plentiful than they were twenty years ago. Is this a result of e-commerce or a confluence of consolidation? Each of these issues affects consumers and the way we go about our daily shopping activates. We are a society that follows trends, and the mall trend may be changing or just disappearing. This paper will cover were malls came from, where they are now, and what is foretold about the future of shopping malls and big box retailers.

The current and future of Shopping Malls and Big Box Retail Stores
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Southdale has had other anchor stores in the past, one named Dayton's Department Store whose name changed to Marshall Field's in 2001. When Marshall Fields' parent, May Co., was sold to Federated Department Stores, then parent of Macy's, the store was rebranded as a Macy's in 2005. Malls need big box department stores acting as anchor tenants. Chains like Macy’s, Dayton’s, Hudson’s, Marshall Fields, and Bloomingdales would fight for a prime corner 25 years ago, today all 5 chains are part of Macy’s. These higher end stores have no competition against weaker stores like Sears and JCPenneys. With less stores fighting for prime locations mall rents have decreased while vacancies increase. This confluence of consolidation has created “dead malls” across America.
According to Green Street Advisors’ 2015 U.S. Mall Outlook more luxury department stores are pulling away from weaker malls, often malls with a Sears or JC Penney. Retails most important metric is sales per square foot which rates malls as, “A” malls, “B” mall, “C” malls, and “D” for death malls. According to Green Street, mall real estate investment trusts are up 36% since 2010. In 2013 at Long Island’s A++ mall, Roosevelt Field, sales rose to $945 from $900 per square foot. There are 39 Penney stores set to close this year, almost all are located in weak malls, and many have Sears as a co-anchor. More malls are closing than new ones opening, it is expected that 15% of the 1500 U.S. malls will close in the next decade.

Shopping Mall and e-commerce
Many believe that e-commerce has a lot to do with malls becoming “dead malls” but online sales only accounted for 6% of retail sales last year. Although convenient, cheap or simple Amazon or other online stores are, “experience” is not really the description we would apply to the use of them. People go to malls not just for the shopping but retail therapy. High end malls today boast indoor amusement parks, high end boutiques, and upscale department stores. Tom Simmons, who oversees the mid-Atlantic shopping center division of Kimco, another real estate giant, is more blunt. “There are B and C malls in tertiary markets that are dinosaurs and will likely die,” he said, but “A malls are doing well.” (Simmons)
Future Malls.
Traditional malls may be a dying breed but will always have a customer base, elderly people gather socially and exercise. The Census Bureau estimates that by the year 2050 there will be over 88 million people over the age of 65 in America, this alone is a core customer base for malls. Malls that have been deemed as ghost malls are not just being demolished but being converted into useful spaces like higher education schools, housing businesses, or even ice rinks. As more malls become less retail and more multipurpose we will see less ghost malls. PwC's Carlock said he expects to see everything from restaurants and grocery stores to spas and body sculpting classes inside the mall of the future, as consumers look to...

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