Retail Analyst Predicts One-Third of American Malls Will Close
American shopping malls have been in decline since the 1990s, thanks in small part to teenager takeovers, and in large part to online shopping. According to retail analyst Jan Kniffen, that trend is set to continue, with hundreds of enclosed malls around the country likely to close in the near future. In other words, get your Orange Julius visits in while you still can.
Speaking with CNBC about the retail market, Kniffen said that shoppers are ditching large department stores like Macy's for cheaper retailers like H&M and Zara, or skipping the in-person experience altogether and buying online. He called America the most "over-stored place in the world" with an unsustainable 48 square feet of retail space per capita (twice as much as any other country). Since large department stores are considered anchors for enclosed shopping malls, as they bring in fewer shoppers, the effect is subsequently felt by the smaller stores that share mall real estate.
"If you look into the future—not that far—we've got 1100 enclosed malls in America, we probably need 700," he said. "The top 250 will do fine, the rest of them are going to struggle. Macy's has got 800 stores, more or less. They probably need 500, 550 ... you're going to see this huge reduction in brick-and-mortar space."