Too early to call time on the mall?
Last month, work took me to a dozen malls to undertake visits to stores on behalf of a client. Seeing a variety of malls, in a number of countries, over a short span of time offered a useful insight into the current state of the mall market. As might be expected, malls have coped differently in their responses to the coronavirus. A mall I visit often, Meadowhall in South Yorkshire, responded well to social distancing requirements and from day one of the re-opening, set up clear systems of one-way circulation and crowd management. On my last visit I was interested to see that most stores now have a red-green signalling system to indicate when the capacity of individual stores has been reached. By way of contrast, Täby Mall in the suburbs of Stockholm, requires only the most minimal precautions to be observed, the Swedes having chosen the path of ‘herd immunity’ many weeks ago.
If the health of the mall can be judged by the numbers of vacant units, then the UK malls do seem to be faring badly at the moment. Gaps in the storefronts previously occupied by TM Lewin, Cath Kidston, Victoria’s Secret, Monsoon and others are particularly dispiriting, particularly in the once-thriving Trafford Centre, soon to be auctioned off following owner Intu’s insolvency. Footfall does not seem to have collapsed entirely and retail sales accelerated by almost 14% between May and June according to the UK’s Office for National Statistics. Admittedly, a fair proportion of these sales are online and unlikely now to return to the brick and mortar store, nevertheless it is indicative that whilst retail activity is quick to recede, it’s also quick to return.
Where retailers are surviving, it’s important to note that many are scaling back their physical presence in the mall or high street or moving more business online. It seems that this will inevitably lead to an over-supply of retail floor area and anyone concerned with the consequences of this should keep a close eye on the proposed planning reforms recently announced by the UK government. Whilst much comment has already been made on how the reforms will affect house building, the changes to zonal planning and the loosening of use classes might prove equally significant in the commercial sector. The Wall Street Journal recently reported on Amazon’s interest in redundant US mall department store space for use as fulfilment centres. Given the explosion in demand for fulfilment space in the wake of the pandemic, and considering it can take two years to plan, design and build a major facility, this move is perhaps a logical first step to repurposing surplus mall space. The remaining retail space will need to work hard to entice customers back, but as people shy away from public transport and seek better managed (and frankly safer) shopping experiences, I believe that quality, experience-driven retail will win out. Despite coronavirus, store closures and mall insolvency, I don’t believe that we are ready just yet to give up on our malls.