It only makes sense that the first indoor shopping mall was built in a state known for extreme cold weather. As residents braced for yet another winter, the warm confines of Southdale Center opened its doors on October 8, 1956.
Large retail outlets soon dotted the landscape nationwide as shoppers flocked to make all of their purchases under one roof. Written off as dead in the late nineties, shopping centers made somewhat of a comeback. However, recent data reveals that shopping malls may not survive the latest dire predictions.
Once prominent in malls throughout the country, both smaller niche and high-profile retail stores are seeing significant sales declines leading to massive store closings and potential Chapter 11 filings. Others are fighting to survive by restructuring their product lines or transitioning into online-only businesses.
Regardless of a store’s size or business strategy, one common thread exists. They are leaving their mall spaces behind, seemingly at a record pace. Stores that once prided themselves on unique brands and products are losing to generalists who are more price sensitive, drawing customers who are less loyal to brands.
According to Ken Perkins of Retail Metrics, first quarter, same-store sales growth statistics have tied for the worst quarter of comparable sales growth since the Great Recession of 2008. Sales expectations for the second quarter show few signs of health.
Additionally, the Labor Department announced that retailers shed 6,100 jobs in May with a majority coming from department and other general merchandise stores. Currently, one in ten American workers is employed in the retail industry. Those who survive downsizing could eventually see their jobs lost through automation in the coming years.
Amidst a flurry of bankruptcy filings, retail still seems to have a pulse, thanks to Wal-Mart, Costco, and other big-box locations. Yet, for how long before shopping malls enter the “whatever became of” category?