Shopping malls in the US have been trying for years to attract new visitors to counter falling foot traffic. The mall was seen as an anachronism even before the coronaviruses hit.
It looks like there may be a strategy for the old standby to survive amidst the hordes of Amazon delivery vans.
Stores that sell groceries.
The opening of the 99 Ranch Market at the Oakridge mall in San Jose, California drew a lot of people. The mall has seen a jump in foot traffic since then, with customer visits up more than 10% in July compared to pre-pandemic levels.
The supermarket has attracted people with its dining hall and tea bar. 99 Ranch took up residence in one of the mall's anchor spots, which had usually gone to massive chains like Target Corp.
The shopping center at the Valley Fair in Santa Clara saw an increase in visitors after Eataly opened. It was one of the better performing malls in the US and Eataly seemed to drive more foot traffic. During the opening week of the store, visits to the mall exceeded 20% for the first time in months, and have remained elevated compared to 2019.
Malls had closed stores and bankruptcies before the swine flu hit. They didn't pivot fast enough in the face of Amazon. When the threat of ecommerce became clear, owners had to find ways to get people out from behind their computers with new and strange offerings.
Between 20% and 25% of US malls were predicted to fail in five years by Credit Suisse.
The Covid 19 arrived. Dozens of mall-based retailers sought court protection. Bed Bath & Beyond and a number of other stores are closing.
The test isn't just about foot traffic, it's also about attracting other retailers The strategy seems promising for now.
Placer.ai's vice president of marketing said that the result has been a rise in other tenant types that could have a waterfall effect. There is reason to believe that their role within this segment will increase.
Although grocery stores have anchored strip malls for decades, traditional supermarkets and groceries haven't been a dominant presence. According to data from Green Street, half of shopping malls have a Target store. It's more common overseas.
Over the last few years, grocery stores have grown in popularity. Grocers have had the most store openings, according to an analysis of store openings from Green Street.
According to Emily Arft, a retail analyst at Green Street, the resilience of grocery-anchored strip centers or open air-retail during the Pandemic has led to grocers becoming more commonplace tenants within the mall spaces. That reinforced the importance of bricks and mortar retail.
The adoption of in-store pickup for online orders helped cement the relevancy of brick and mortar stores.
Roughly half of grocery stores at shopping malls are located in what is called a "Class B" mall, not the gold-standard Class A mall. Middle-class clientele are more likely to visit Class B malls. They had to think more creatively when it came to finding tenants. There are more than 300 malls in the US.
Grocers are going to be required in malls that are struggling more.
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