The worst is yet to come for American shopping malls | Hacker News Reader

The worst is yet to come for American shopping malls

money.cnn.com

35 pointsMilnerRoute52 comments

Content-free catastrophe clickbait like this is likely a good indicator that the mall-closing phenomenon in the states has peaked.

Lots of the retail stores in trouble were victims of high debt loads from private equity buyouts rather than major competition from online shopping.

Almost all of the major retail chains are now very competitive in online and mixed online/in-person shopping models and mall operators are re-tooling malls with a mix of retail and experiential stores and even governmental and professional services.

Even Sears looks like it might survive in some form and smart observers like Scott Galloway think its more likely than not that Amazon will buy a major department store soon to keep up with the Walmarts and Best Buy's that have effective physical footprints.

Amazon's phenomenal and huge growth is not coming from no where. There will be significant casualties.

https://ei.marketwatch.com/Multimedia/2017/01/19/Photos/ZH/M...

> major retail chains are now very competitive in online

If that was the case Amazon wouldn't have this type of growth.

One just has to watch out for direct Chinese marketplace apps like Wish and AliExpress getting more North American market and cutting out Amazon's system. Basically Amazon can be disrupted itself, at least to a degree, when it is nearly filled with Chinese source goods.

North American B&M retailers are mostly screwed. This article on CNN isn't wrong.

The other element is restaurants, I've noticed malls that have name brand chain restaurants always seem busy.

People will go out to eat, and since they are there do some shopping. There are still things that are better buying in person rather than getting something shipped, not liking it, shipping it back, etc.

Yes, 'Fast Casual' in the Chipotle and Panera style has seen a huge growth boom as well as experiential retail like the Apple Store, Sephora Makeup, Alamo Drafthouse and etc..

Personally I try to buy everything online that I can't walk to and I bought a lot at Best Buy this year. They gave me free wall mount installation from their local location on my television that I bought from their web site and it's nice to have a physical location nearby for bigger purchases in case you need to return something.

In addition, the Walmarts and Targets see an obvious future where you buy things from their web stores online but just have it shipped to their physical locations where you can pick it up during your weekly grocery run. This is already a reality.

There are clear secular trends towards online shopping and against malls but a lot of the shakeout has taken place already and a lot of the weak hands have already left the game. Those that remain along with new entrants are adapting quickly which is why I think the 'retail apocalypse' has already hit the peak of the hype cycle.

Dan Bell's Dead Mall Series is oddly depressing and he often gives some back story into their declines.

https://www.youtube.com/playlist?list=PLNz4Un92pGNxQ9vNgmnCx...

A common theme appears to be either struggling footfall or the fact that what I guess are major US anchor stores (Maceys, Sears, KMart) going through tough times. Once the anchors move out, it becomes difficult to run the mall.

Interestingly, in one video, the Mall was half turned into offices, and it had a thriving food hall which I thought was a great idea to keep it relevant. No other dead malls in the series appear to adapt so they become ghost towns then abandoned and later demolished.

A shame really.

I love the series. I notice also in the series an anchors space would often be subdivided into 10' x 20' vendor areas. that way small community businesses could sell their goods for very little overhead.

The Rackspace head offices were built in an abandoned Texas mall (Windsor Park Mall, now The Castle, in San Antonio [0]) which is a nice recycling of an otherwise dead space...

0. https://blog.rackspace.com/get-an-inside-look-at-the-rackspa... and https://youtu.be/J4b0UlAZcH4

In New Zealand and Australia (and I'm sure many other places, but those are the ones I know first-hand) malls also feature supermarkets, post offices, and banks. They're designed to be a destination for not just "recreational" shopping but day-to-day errands. Always missed that when in US malls, and apparently they're still not cottoning on.

In the US, malls have been fighting that trend. Until recently they saw those stores as a cancer. Grocery stores and work-out locations would 'push out' the high dollar customers. Of course the internet is taking away those high dollar customers so the malls need those stores now.

I stay away from the big local mall because of the lack of security. Also 2/3's of the mall are women's clothing stores. There nothing really there for me anyone more.

The next closest mall is a rotting heap that is kept alive by the marker space and a theater. They need to repave the parking lot and fix the roof to attract new good stores.

What do you mean by lack of security? Do you feel you're in danger of being robbed in a mall?

Probably in the parking lot.

The podcast 99% Invisible has an episode about the history of shopping malls. As conceived by Victor Gruen, a European immigrant, malls originally included these everyday places. He imagined them as "third places" for the suburbs beyond home and work. Later he became a critic of what malls became. It's worth a listen/read:

https://99percentinvisible.org/episode/the-gruen-effect/

I clicked this headline thinking "hmm it's not going to be Howard Davidowitz banging this old drum?" and sure enough it's Howard Davidowitz with his same talking points one decade later...

Maybe someone from the US can clarify this for me: are people upset about this as an indicator for the economic changes happening at the moment, or are they genuinely concerned about the malls themselves?

Never having left Europe myself, I could relate to the former, but not to the latter. What makes those malls so... relevant?

Malls have roughly the same function as "main streets" do in European towns - a relatively neutral public space - and I suspect the worry for their demise is largely the same as the worry for the demise of the main street in Europe.

The difference with malls is they are private businesses (and private property) so there are many restrictions to what the public could otherwise lawfully do on a Main Street (parades, festivals or demonstrations) - that is without express permission from the property owner.

Plus, cities are thriving so main streets are not going anywhere -- the shops probably change to reflect the online shopping trends though. More cafés, definitely.

Small town main streets are going away sure, but those towns are slowly emptying anyway.

Organizing a parade or festival on main street would also require a permit from City.

Mostly the former probably, but for many it's the latter as well. Malls historically were a central gathering point where many people burnt an entire day just shopping around, grabbing lunch at the food court, and just in general "hanging out". It's where the term Mallrat (and the move _Mallrats_) gets their naming from.

In more recent years it's not as important and the day trips probably aren't there, but many still flock to malls around holidays for shopping and also during the summers in places where climate control is either too expensive or unavailable for people (same with theaters). Likewise, just having a large availability of stores and a place to put the kids (or just to meet in general) is still really important. Older folk also enjoy walking the mall as it's a large and safe area (also climate controlled).

So basically, it still has some functions in society beyond being representative of general economic health.

To me, a lot of these functions seem like things that could easily be available to the individual (like AC) or should be provided to the general public, not just in malls (like being a "safe area").

But thank you, that does clarify it indeed. :)

> "safe area"

This means "I can leave my teenagers there without worrying". Malls have private security. They can (and do) escort people out who are doing things that are bad for business. That includes all sorts of things that are legal (and should be legal!) but aren't appropriate in that context. Other things are illegal but impossible to eliminate from public life (and public parks). Many of those things are things you'd worry about your teenager being around.

Like public drinking. Drug use (legal and not). Misdemeanor violence. Sexual harassment from random citizens (creepy middle aged people with panel vans). Public sexual conduct (sex in the bushes or in the bathroom stall).

In other words, "safe area" is code for "free low-grade babysitting".

There are some places, however, that are starting to put restrictions around minors in Malls at given times of day. The article mentions Simon Property Managment and I think that company now disallows anyone under 18 within their malls after 5pm, Friday through Sunday. This seems even stranger to me because of the foot traffic and disposable income of many minors; feels like a target demographic that the malls are shunning, then complaining about lower amounts of foot traffic.

I’m going to clear this up really quick because what OP said was extremely weird. People do not go to malls for AC and I live in the Deep South where it humid as hell.

Safe Area is a weird choice of words. I guess it means parents can drop kids off at a place that has decent rent a cops. Generally keeping kids safe from themselves or weirdos I presume. My parents would’ve never said I like dropping my kids at the mall because it’s safe.

Well, just saying how it was where I grew up in the Midwest. Air Conditioning was not standard in many of the older houses and when there was a heatwave, people would go to malls/movie theaters and relax there because the buildings were publicly accessible, had stuff to do to kill time, and were climate controlled. I know that 102F and 99% humidity is par for the course down South, but, you know we Northerners just don't really handle that the same way. I remember during heat waves growing up that the local news stations and the city would advise going to places where there is air-conditioning if you didn't have AC.

As for safe, again, maybe just different up north, but it's absolutely common to just give your kid $20-$40 go to the mall to hang out with friends or to kill time shopping, or at an arcade (for the few that still have one), or to go to a movie at the mall or whatever. The security tends to be pretty strict. One of the malls where I grew up had such strict security they wouldn't let minors in without guardian being present). The adult would go shopping or grab lunch or read, the kids would run off and do whatever.

So, sorry that our experiences don't mesh, but it absolutely did happen. Here's a video from Anaheim Fire and Rescue recommending that people go to the mall during a heat wave: https://www.youtube.com/watch?v=msk2Qd4TkJs

Edit: added clarity to last sentence

Fair enough, I took your people who don’t have AC as something like a bunch of poor people who have no where else to go. Not people who just don’t have AC due to climate.

I also took Safe Place as a symbol for violence the media portrays in the US or something. Maybe watched too much news last night.

I understand what you were saying now!

They would have said you can go to the mall and stay out of trouble, which means the same thing.

I remember when I was a kid and "Safe Area" meant "the distance I could ride a bicycle and still make it back home by sundown." Times sure have changed. People are paranoid if they think a mall is some safe island within a hellish sea of suburban crime.

That's an interesting question. How is a mall closing a problem provided that people are still buying things, albeit from a different company to the one they bought from before?

If money continues to move around the system, surely this is something that looks like an economic indicator, but is really more of a cultural shift. (Separately there could well be economic problems with the decline of manufacturing etc.).

Are shopping malls somehow deeply rooted in the American psyche? Watching US movies from the 80's and 90's might suggest that they are...

that last bit is what prompted my question.

crydas' and mseebach's answers make a good point that for some reasons, malls in the US started taking on other roles than just the places of exchange for everyday goods. so from that perspective, if malls fail, those roles need to be filled by some other entity.

It’s a sentimental attachment for Gen Xers.

Not just the psyche, the landscape, too. Many US towns are so sprawled out that the mall was the only thing they had for public space.

When the local mall closes, a bunch of people who've spent much of the past decade sitting on their couches, and aren't necessarily happy about that situation, realize that this is probably how they're going to be spending the next decade, too.

Nostalgia and community. It was the one place 2-3 generation would gather at for events and shopping. As these break up and go away we see our childhood and teens go away with them. Finally its blight.

These empty husks tend to take the surrounding communities down with them. It can take decades to get them either resold or at least demolished. They invite homeless people and gangs. There's an abandoned mall in Cleveland, Oh that usually has about 4 bodies found in it a year. But its stuck in court because the city doesn't want to take on cost of back taxes.

That sounds right. My family and I used to go to the mall every Monday night to grab food at hang out. I'd always hit up the book stores, game stores, and electronics stores.

When I visited Malaysia earlier this year I asked on of the residents there what's the deal with malls there.

She said it was the place all the kids went to when their parents kicked them out (don't watch tv all day!) because they had aircondition. There was a social component as well.

I think this is the case around a lot of SE asia. Bangkok has plenty of massive shopping malls, and they're very often busy. It's a great place to hang out when it's 34 degrees out at 80% humidity :)

Definitely a SE Asia thing. Malls in Asia are closer to amusement parks with shopping than straight retail with a cineplex attached. In the Philippines the SM mall chain, run by the Sy family from China, is still on the upswing with no end in sight. Always busy on nights and weekends, and filled with kids hanging out because it's so damned hot and humid outside all the time (and the average age in the Philippines is 23).

Another factor in SE Asia is that most people (esp. young people) do not make purchases with credit cards like they do in the US and which makes Amazon's dominance assured and hastens the decline of malls. Mobile is huge, and mobile payments and cash are still king. Lazada is big in the Philippines because they accept mobile payments, e-wallet funds, and COD.

>are people upset

In general, people in America really aren't upset about the trend of dying malls. They just choose to shop elsewhere such as the newer open-air shopping centers or online places line Amazon. The resulting decline of malls is just collateral damage and most have no emotional attachment about it. (Note that the CNN article isn't reporting on any sentiments about it. It's just relaying the economic reality that more stores are closing which lead to more dead malls.)

Also, suburban malls have been in decline since the mid 1980s long before Amazon came on the scene. Amazon is just accelerating the decline.

>What makes those malls so... relevant?

They're less relevant now but malls were a phenomenon in the USA because of cars and cheap suburban land away from city downtowns. Before the World Wars, Americans shopped in downtown "main streets".[1] The rise of car ownership by middle-class families in the 1950s enabled suburban single-family homes which fueled the rise of the malls.

[1] https://www.google.com/search?biw=1312&bih=1423&tbm=isch&q=d...

> the newer open-air shopping centers

The Circle of Fashion has been completed. The early, 1950s-era malls were outdoor. In the Chicago area, at least two of them survive to this day (Oakbrook Center and Old Orchard). Park Forest Plaza didn't fare so well after the enclosed Lincoln Mall opened in 1973 a few miles west in Matteson.

Now, though, Lincoln Mall has been demolished except for the Carson Pirie Scott store, which was made freestanding.

Over in Orland Park, in the wake of enclosed Orland Square's success, a second enclosed mall was built just to the south. It was not a success, and it was eventually turned inside out as a sort of double-sided strip mall, which now thrives.

> What makes those malls so... relevant?

One factor not mentioned so far is that they are large employers of low skilled labor. If malls disappear, this will be one less employment option.

I think one of the biggest effects people aren't talking about in other comments are jobs.

Amazon can automate the hell out of getting goods to me, so we essentially don't need 1000's of stores and millions of retail workers anymore.

Someone told me about a mall in Cincinnati that was now a ghost town. I visited it a few months ago and it's surreal. Over half the storefronts have blacked out windows. Almost all the remaining stores have all conglomerated on one side of the building. I was pretty shocked when I saw my favourite body jewelry store was still there. I bought some earrings.

A more quantitative, in-depth article on the topic was published by Bloomberg in early November.

https://www.bloomberg.com/graphics/2017-retail-debt/

Just a thought, malls in America all look the same (with some exceptions). I do realize this was a concious effort based on data that consistency in mall design reduces "friction" and provides "familiarity" to consumers.

This isn't the case in a lot of other countries/cities; Dubai for example has multiple malls which look entirely different with it's own unique theme (or themes). They have an overlap of brand name stores, yet the business is brisk. Can American mall owners learn something from this?

they need more arcades, plenty of opportunity for full 4k gaming and vr experiences that would be too expensive for many in the home.

A lot of malls started kicking out the arcades in the early 1990s, assuming they had them in the first place.

Then they started kicking out the kids completely, and act surprised when they don't return after reaching adulthood.

Maybe it's also just that a mall is a place where you shop for fun, and post-gen-X there's been less general fetishizing of consumption all around.

Good, I wish malls would just die out and disappear. They're horrible sterile temples to overconsumption and consumer culture.

Since bulldozing trees began many of those malls, how about returning them back to the natural state we clearcut?

We should repurpose these dead malls. On that note -- how feasible would it be to buy a mall and turn it into an indoor city? Line the top with solar panels, and it could be neat.

Might be illegal, due to zoning and building code.

See my earlier comment [0] about Rackspace HQ. Apparently they bought the mall for USD 27 million in 2007 [1] so it's certainly feasible, if not cheap.

0. https://news.ycombinator.com/item?id=15922440

1. https://en.wikipedia.org/wiki/Windsor_Park_Mall#2007-present...

To summarise the summary:

- Amazon is taking all their business and will continue to do so even more

Longer summary:

- shopping malls have been in decline for years

- the decline seems likely to continue due to amazon's growth

- once large department stores leave, smaller shops lose customers who would have passed them on the way to the larger store

- smaller stores often have break clauses in their leases in case this very thing happens

- this has been said before

Reply on news.ycombinator.com