The passage of a year has made a considerable difference in the levels of traffic and sales being enjoyed by U.S. malls. In late summer 2020, when Placer.ai focused a webinar on the sector, the future of malls looked iffy at best. In the analytics firm’s update this month, that outlook is considerably brighter, at least for properties that were among the better-performing malls before the pandemic. 

July 2021 data from Placer.ai showed traffic at indoor malls roughly flat with 2019 levels, while for outdoor malls it was actually up around 2% over pre-pandemic averages. “This recovery has been fairly impressive, especially when you consider the wider narrative around ‘the death of the mall,’” moderator Ethan Chernofsky, Placer.ai’s VP of marketing, said on the August 12 webinar.  

Panelist Ben Witten, VP finance & asset management with Trademark Property Group, concurred, saying, “Malls are basically back to 2019 levels.” He added that there have been some geographic nuances—traffic is still down in California and New Jersey, while it’s up in the Sunbelt—in keeping with the pandemic’s varying impact regionally.  

What’s especially significant about the current level of recovery is the conversion rate, as shoppers come to malls to shop.  “In many cases, we’re seeing sales actually exceeding 2019 levels,” Witten said. 

The mall sector isn’t in the clear yet, though, pointed out Pam Danziger, founder of Unity Marketing Inc. and senior contributor to Forbes. She likened what we’re seeing currently to “the back end of a hurricane,” with 2020 representing the storm’s strong initial band of winds and the first half of 2021 representing the calm eye of the storm.  

That back end of the storm manifests itself in COVID-19’s delta variant—which has led to many consumers putting their masks back on and limiting their travels—supply chain problems and rising prices, said Danziger. “We’ve still got a ways to go.” 

In the current return of shopper caution, open-air centers may have an advantage from a perception that it’s safer to walk around outside, although the space inside an indoor mall may be just as large, Danziger said.  

“We’ve got to look at people’s feelings, not the reality,” she said, adding, “We should apply tactics that work in outdoor centers and apply them to indoor centers.” 

Asked to elaborate on some of those winning open-air strategies, Witten observed that throughout the pandemic, centers with a grocery anchor or a needs-based anchor have tended to outperform. You’re starting to see indoor-mall landlords looking to these types of anchors, which can drive traffic throughout the week, he said.  

Similarly, those centers that have benefited from landlord investment are flourishing, and Witten pointed to new store concepts coming into the mix. Looking at Amazon’s 4-star concept, he said, “the majority of the initial locations were in enclosed malls.” The brick-and-mortar and e-commerce giant has continued along these lines with more recent location selections.  

“The pandemic is going to have long-term consequences,” said Witten. “But I do believe that the asset with the super-regional draw is going to continue to outperform. They’re just in a constant state of evolution.” 

On-demand replays of the hour-long webinar are available by clicking here.