Malls are thriving in areas least hit by inflation

Malls and shopping centers aren’t dead yet, Retail Brew has previously reported. Although their role has shifted over the past few decades, they continue to play a key role in the American retail landscape.

Historically, malls and shopping centers have been community hubs, but foot traffic declined during the pandemic. Rising costs of consumer goods, gas prices, and inflation fears haven't helped.

But a recent report from foot traffic analytics firm Placer.ai has found that “states with lower-than-average inflation are also experiencing stronger-than-average YoY visits” to shopping centers, Placer.ai spokesperson Jesse Kent told Retail Brew.

• “By understanding regional trends, format based behaviors and more, shopping center owners can better optimize their fleet to drive success and meet shifting consumer demands.”

States with lower-than-average inflation, like Vermont, experience stronger year-over-year visits to their shopping centers, according to the report, and “a dissipation of inflationary impact could signal a rapid rise in consumer foot traffic.”

• While different kinds of shopping centers have different rates of pandemic recovery, as well as unique time-of-day, day-of-the-week, and seasonal visit patterns, those with grocery stores have seen the most growth over the past three years. Restaurants and specialty retailers also drive foot traffic.

Outlets appeal amid inflation: Tanger Outlets has seen increased lease signings in its open-air centers since 2021 and consumers seem to like the cheaper prices on brands and logos that are “on sale every day,” Tanger CEO Stephen Yalof previously told Retail Brew. “I think the most important thing is that inflation favors value. So as prices go up, if you want to make your dollar stretch further, that value channel definitely lends itself.”

Meanwhile, grocery-anchored shopping centers are experiencing a stronger Yo3Y recovery than open-air lifestyle centers, and “several shopping centers with grocery stores also seem to see a larger share of repeat monthly shoppers,” the report states.

• These malls draw suburban traffic, and their strength is their ability to attract regular visitors.

Mixed-use spaces are also in demand. J.F. Finn, principal at architecture firm Gensler, previously told Retail Brew that Boston would not approve a housing development unless it had a grocery store on the ground floor.

Correction 4/20/23: This story has been updated to more accurately reflect an attributed source’s role.