Foot traffic in shopping malls is up significantly over recent weeks, offering hope for a sector that was among the hardest hit since the pandemic began.
In a survey sample of 52 U.S. malls in March, foot traffic surged 86% compared to the same month a year ago, according to Placer.ai. However, that comparison is to March 2020; in the middle of that month, the pandemic first led to shutdowns across the United States. Foot traffic in March 2021 was 24% lower than in March 2019.
But for mall owners, it’s a hopeful sign. “There’s no question things are better,” Bill Taubman, president and chief operating officer of Taubman Co., told The Wall Street Journal. “Sales are also better than anticipated four months ago.”
Since the vaccine rollout, shopping centers have noticed an uptick in shoppers. Retailers and restaurants reported a large increase in sales on Valentine’s Day and are hopeful that consumers will continue to come back to stores over the summer.
However, the recovery may be more limited in some markets and to certain types of retail. Malls in places with an oversupply of stores and limited population growth are most at risk, analysts told The Wall Street Journal. Also, customers are spending more on casual wear, accessories, jewelry and watches—offering a stronger rebound to stores that cater in those areas over those that focus on formal dresses or men’s suits, analysts note.
But another hopeful sign for a mall turnaround: Property owners say rent collection among malls is improving. “Our collection rates are above 90%; that’s really good news,” Ami Ziff, director for national retail at Time Equities, a real estate firm that owns eight enclosed shopping malls and dozens of open-air shopping centers in the country, told The Wall Street Journal. Short-term leases are growing more common and the type of tenants are expanding to include health care providers and more restaurants.