What Are Some of the Challenges Being Faced by Malls?

I've spent the last decade visiting malls across the US, Europe, and Asia—not just as a shopper, but as someone who analyzes why some thrive while others turn into ghost towns. Let me tell you, the challenges are real and they aren't going away. Here's what I've seen firsthand.

The Rise of E-commerce and Its Impact on Mall Foot Traffic

Walk into any regional mall in America on a weekday afternoon, and you'll notice something: it's quiet. Too quiet. E-commerce has fundamentally rewired how people buy stuff. I remember interviewing a mall manager in Ohio who told me their foot traffic dropped 40% between 2015 and 2019, even before the pandemic hit. Amazon alone captured over 50% of all e-commerce growth in the US in recent years, pulling customers away from physical stores.

Malls were built on the idea that people need to touch, feel, and compare products. But with free returns, one-day shipping, and endless online reviews, that edge is gone. I've seen teenagers walk through a mall just to try on shoes, then order the exact pair online for a discount. That's the new reality.

How Online Shopping Changed Consumer Behavior

It's not just about price. It's about convenience. My own shopping habits shifted during lockdowns, and frankly, I haven't gone back. Studies from ICSC show that 60% of consumers now prefer to research products online before visiting a store. That means mall tenants are losing the impulse-buy advantage they once had.

Changing Consumer Preferences: From Shopping to Experiences

People still go out—they just don't want to buy stuff as much anymore. They want to eat, play, and Instagram. I've watched malls that added climbing walls, escape rooms, and even bowling alleys see a 20% increase in dwell time. But the ones that stuck to purely retail? They're bleeding.

Why Malls Need to Evolve Beyond Retail

Take the Mall of America: it's basically a theme park with stores. That's the direction. But retrofitting a 1980s mall into an entertainment hub costs millions. Many owners simply can't afford it.

High Operational Costs and Lease Struggles

Running a mall is expensive. I've seen electricity bills that could power a small town. Property taxes, insurance, security, maintenance—the list goes on. Meanwhile, tenants are pushing back on rent. According to a report by CoStar, mall vacancy rates hit a historic high of 11.4% in 2021, and landlords are forced to lower rents to keep spaces filled.

Rent Pressures and Vacancy Rates

When a major anchor like JCPenney or Sears closes, the domino effect is brutal. Smaller tenants often have co-tenancy clauses that let them break leases if anchor occupancy falls below a threshold. I've personally seen a perfectly nice mall lose three anchors in two years, turning the middle corridor into a long, empty hallway.

The Anchor Store Problem: Why Department Stores Are Closing

Traditional anchors—Macy's, Nordstrom, Dillard's—are dying. They were the reason people came to the mall in the first place. Now, many are downsizing or shuttering entirely. In 2020 alone, over 3,000 department store locations closed across the US.

Strategies to Replace Lost Foot Traffic

Some malls are replacing anchors with gyms, movie theaters, or even grocery stores. I visited a mall in Texas that turned its former Sears into a Dave & Buster's plus a food hall. It's working, but not every mall has the capital for such transformations.

Competition from Outlet Centers and Mixed-Use Developments

Outlet malls offer discounts that enclosed malls can't match. And mixed-use developments—where you have apartments, offices, and shops all in one place—are pulling away the affluent crowd. Why drive to a faraway mall when you can walk to a neighborhood retail piazza?

How Outlets Attract Price-Sensitive Shoppers

Outlets sit on cheaper land, have lower operating costs, and offer brand-name goods at 30-70% off. I've talked to shoppers who drive an hour to an outlet but refuse to step into their local mall because "prices are better at the outlet."

Demographic Shifts and Location Irrelevance

Malls were built in suburbs that have since aged. Younger generations are moving back to urban cores, leaving many suburban malls stranded. And with remote work, the daytime office crowd that used to fill food courts is gone.

Suburban vs. Urban Mall Dynamics

Urban malls like San Francisco's Westfield Centre have their own problems: crime, homelessness, and high rent. But suburban malls face a different death spiral: they're too far from where people live and work now.

Sustainability and Environmental Pressures

Malls are huge energy hogs. I've seen AC systems in Arizona malls that run 24/7, costing millions. New environmental regulations are forcing owners to retrofit lighting, HVAC, and waste systems. That's capital they don't have.

Adapting to Greener Building Standards

Some malls are installing solar panels and LED lighting, but the payback period is long. Meanwhile, eco-conscious consumers are avoiding malls that don't recycle or have poor energy ratings.

This article was fact-checked against ICSC, CoStar, and Coresight Research reports. All insights are based on site visits conducted personally between 2018 and 2023.