Resurgence in US shopping centers signals shift in consumer behaviour

U.S. shopping centers are experiencing a notable resurgence, marking a promising shift in consumer’s shopping behavior. According to the latest update to Placer.ai's Mall Index for March, visits to shopping malls have seen a steady increase for the second consecutive month. The data reveals that visits to indoor malls surged by 9.7 percent year-over-year in March, while open-air shopping centers and outlet malls experienced even more substantial growth, with increases of 10.1 percent and 10.7 percent, respectively.

Visits to open-air shopping centers have not only rebounded but have surpassed pre-pandemic levels, showing a 1.6 percent increase compared to the first quarter of 2019. This resurgence is a promising indicator of the recovery and resilience of the shopping center industry.

The findings align closely with insights from their recent white paper titled "The Comeback of the Mall in 2024." The paper highlights the significant improvement in foot traffic to indoor malls, which saw a decline of only 5.8 percent in 2023 compared to 2019. This marks a remarkable turnaround from the more than 15 percent drop experienced in 2021. Similarly, open-air shopping centers saw a minimal decrease of just 1 percent in foot traffic last year compared to pre-pandemic levels.

Overall, the shopping center industry experienced a modest decline of 2.3 percent in foot traffic in 2023, indicating stabilization and the potential for a resurgence in 2024. With consumer confidence on the rise there appear to be renewed interest and opportunities for retailers and shoppers alike.

One mall that has seen success despite a tumultuous start when it opened in 2019, is Manhattan’s Hudson Yards, which has become a top shopping destination in New York. Last year, average monthly visits increased 19 percent year-on-year, far outpacing growth at other top malls, such as Bal Harbour Shops in Florida and the Mall of America in Minnesota, according to Placer.ai.

Despite numerous predictions of the demise of malls, recent consumer behaviour underscores the enduring significance of these retail hubs in the American market. Despite evolving consumer preferences, leading shopping centers have adeptly adjusted their offerings to align with current tastes, ensuring their continued relevance well into 2024 and beyond.