Inequality impacts retailers too
December 23, 2015 4:40 PM   Subscribe

High-end malls are doing just great. It’s malls in middle-class communities geared to middle-income customers that are suffering from high vacancy rates and failing tenants.

So what is the anatomy of a good mall?

"Take the retail market in Atlanta, Georgia, for example. Population, jobs, and home values are growing, helped by a concentration of Fortune 500 companies. The city counts more than a dozen malls, but only one gets an A++ grade from Green Street: Simon Property Group's Lenox Square. Lenox Square brings in more than $1,000 in sales per square foot, compared to $240 at Northlake Mall, a C-rated mall eight miles away, according to Green Street.
[...]
Lenox has also diversified its anchors away from department stores to include restaurants and experiential, tech-heavy stores like Microsoft, Apple and Tesla, which can drive a mall's sales per square foot up by more than 10 percent and create the same kind of destination effect a department store once did. Other top malls are putting in traffic-driving amenities such as Whole Foods grocery stores, movie theaters, and high-end services like the Drybar hair salon."
posted by cynical pinnacle (33 comments total) 14 users marked this as a favorite
 
Not to discount income inequality by any means, but perhaps it's also the case that consumers are less interested in blindly buying shit these days? Men in particular are getting pickier about their appearances. I blame social media and ubiquitous photography for this phenomenon.
posted by oceanjesse at 4:47 PM on December 23, 2015 [1 favorite]


Fewer middle-class people = fewer middle-class malls. It's high-margin luxury brands for the rich and Wallyworld Repo Man-style goods for the rest of us.
posted by infinitewindow at 4:50 PM on December 23, 2015 [21 favorites]


If anything was going to get killed by internet commerce, it'd be malls. Stuff at malls is just too stupidly overpriced to not get somewhere else, when there's another option available.
posted by Mitrovarr at 4:53 PM on December 23, 2015 [7 favorites]


Who the hell goes to malls to shop?
posted by Old'n'Busted at 4:57 PM on December 23, 2015 [3 favorites]


Our local mall has about three stores left in it. The rest are all empty storefronts, most decorated with advertising for the mall, cartoons of people with shopping bags, windows stacked high with wrapped boxes almost like Christmas. It's like they're signaling future archaeologists what the building used to be for, before all the commerce left.

It makes for a creepy walk.
posted by mittens at 4:57 PM on December 23, 2015 [23 favorites]


There are two high-end malls within a ten or fifteen minute drive of here, and they are full of people and bustling with activity. The not so high end malls that I have seen are starting to look like ghost towns.

The broader trends are at this point quite clear. Retailers (and malls) targeting the middle class are struggling, because the middle class is struggling. There is money to be made targeting the poor (I can't count how many payday lenders I drove by today) because there are so many of them, and from the rich because they have so much money, but not from the middle.
posted by Dip Flash at 5:12 PM on December 23, 2015 [3 favorites]


Even middle class malls thought they could raise rents endlessly far above the rates of inflation. Without major discount stores, supermarkets, everyday services bringing in foot traffic where are you going to get it from? People too stupid to price check off Amazon? That's an ever shrinking market.
posted by Talez at 5:15 PM on December 23, 2015 [2 favorites]


The two malls closest to me are smaller malls that were both pretty bad 10-15 years ago. In that time one of them has stayed the same while the other has become high-end. I go to the high-end one quite a bit because it has a supermarket (in addition to a fancy grocery store), toy store and book store, as well as a branch of my bank and a library branch. The only time I will go to the other mall is if I am specifically getting something from the department store located there or if I am also going to be going to Toys "R" Us which is in the same direction. Both malls are pretty busy though.

Of the two closest big malls, one is middle-class and the other is high-end. They also must be doing well because their parking lots are always full. I avoid them both because I hate circling for a parking space, although Uniqlo will apparently be coming to the high-end one in the coming year so I'll have to think of something.
posted by any portmanteau in a storm at 5:32 PM on December 23, 2015


Years ago a friend said that the mini-malls of today are the artist lofts of tomorrow.
posted by larrybob at 5:43 PM on December 23, 2015 [16 favorites]


The "other mall" in my area, after slowly losing stores and patronage for years, so much so that it became home to an indoor flea market, is now going to become an "outdoor retail experience"!

Which basically consists of knocking down the empty corridors and turning it into a series of ... pods.
These pods will be will be connected with a series of outdoor walkways.

This, in a place where it rains 7 months out of the year.

I do not think it will go well, but at least the construction spurred the town to extend the public transit network and (kinda) fix the road interchange, so there was a least some benefit.
posted by madajb at 5:45 PM on December 23, 2015


I live in an area that has gentrified pretty rapidly over the last few years. The Dufferin Mall, which is about 5 minutes away, used to be known as "the dirty Duff" but they have stepped up their game and sunk tons of money into renovations. There are still a lot of marginal clothing stores, and their anchor tenants are a walmart and a no- frills grocery store, but Starbucks just opened up. The other neighborhood Mall is called the Galleria. Very few of the stores that are still there are recognizable chains and its basically like walking into a time capsule. It's not long for this world though... The condos are coming.
posted by sevenyearlurk at 6:01 PM on December 23, 2015 [2 favorites]


Years ago a friend said that the mini-malls of today are the artist lofts of tomorrow.

I know there have been previous FPPs on this, but buildings vary on how easy they are to repurpose. On the one hand strip malls are incredibly cheaply built and so are designed to have short half-lives, but at the same time they are basic boxes, built to standard proportions and with standard materials, and so should be easy to repurpose. The last time I was house shopping I was hoping to find a cheap commercial/industrial property to have fun reconfiguring it, but I found that around here specialist developers have that market locked up tight and there simply weren't any possibilities. In other places I am sure there are opportunities and someone could snap up a distressed minimall, cut a deal with the zoning people, and convert it to mixed use with very little fuss.
posted by Dip Flash at 6:20 PM on December 23, 2015


Malls replaced city stores and left the cities to those unable or unwilling to move to suburbs. Now, in many cities, the young are moving back because new types of non-industrial jobs are there. Younger people more often than not do most of their buying online.
Malls became hangout places for the elderly to use for walking, seeing people; and also hangout place for the very young who also went to see people and mix.
posted by Postroad at 6:28 PM on December 23, 2015


The nearest good-sized mall in my area, Greece Ridge, is reliably busy and has a decent run of firmly middle-class stores. On the other hand, there's the Medley Centre, a notorious disaster that even has its own fake Twitter account. (I'm a bit concerned about the new Costco, which is supposed to be an anchor store for an up-and-coming development but isn't in a particularly obvious location for such a thing.) The local strip mall scene in our village, though, is a different matter: storefronts sometimes take years to rent, and don't necessarily stay filled for long.
posted by thomas j wise at 6:45 PM on December 23, 2015 [2 favorites]


The broader trends are at this point quite clear. Retailers (and malls) targeting the middle class are struggling, because the middle class is struggling. There is money to be made targeting the poor (I can't count how many payday lenders I drove by today) because there are so many of them, and from the rich because they have so much money, but not from the middle.

I'm not sure that's what's happening, although for sure spending is contracting. I think it's more that the high end malls have offered a significant enough experience value that they can attract footfall from across all classes. The "middle class" malls on the other hand stuck with the traditional anchors, and those haven't fared well when up against Internet shopping. Furthermore, teenagers now have better options for hanging out online than when the malls became big, and herds of teens used to beg to "go to the mall".

I'm old enough to remember when the big shift from the urban malls to the suburban malls happened. As a child, it was a really big deal to drive into the big nearby midwest city and see the Christmas display at the downtown mall. By the time I was a teenager, it was a ghost town, because the malls had all moved out to the suburbs where they could have bigger displays, more restaurants, and much bigger anchor tenants.

I suspect that what you'd find in the US is that too many malls went in which weren't necessary and which were too big for their surrounding communities; very likely they were doomed from the start. And during that period, the developers didn't think much about good anchors or what a good experience was like-- it was really "build it and they will come". But anything today has to content with the Internet as both a shopping tool and a shared space. The best developers are still able to compete, but naturally they go where they have a larger population base, with a wide spread of incomes.

(I just toured a formerly great mall here in Hong Kong which was now entirely populated by children's lessons, dance classes, and senior citizen homes-- it's a cycle which happens everywhere.)
posted by frumiousb at 6:47 PM on December 23, 2015 [8 favorites]


Queens center is about five stops from me on the train. The surrounding neighborhoods are neither hoity nor toity. And that place mints money.
posted by jason's_planet at 6:48 PM on December 23, 2015 [1 favorite]


( thomas j wise, I spent many many hours at Greece Ridge as a teen-- though I think we called it the Ridge Road mall then and it looks like it has been tarted up quite significantly.)
posted by frumiousb at 6:49 PM on December 23, 2015


and it looks like it has been tarted up quite significantly

They've been doing a fair amount of renovation and expansion recently, mostly having to do with the restaurants.
posted by thomas j wise at 6:53 PM on December 23, 2015


We have two malls, the "old mall" which is a traditional two-story middle class mall with department store anchors (Macy's, Penney's, Sears); and the "new mall" out in the sprawl with far fancier stores but it is OUT. FUCKING. DOORS. So for a while there the old mall was a ghost town when the new mall opened up, but its rebounded pretty well. It's not fancy, but it's full of midmarket tenants and its usually busy-ish. The new mall, their fancy anchors do fine, but they can't keep the little boutiques between the anchors because it's Peoria, nobody wants to be outside getting rained on, snowed on, or trudging through the miserable humidity of July while also getting skin cancer.

I was relieved the old mall didn't die, because I know I can go there and visit three department stores, my second favorite pedicurist, bribe my children with a pretzel, and hit the GAP, Vikki's, Gymboree, Hot Topic, and Claire's. Those things will always be there. At the fancy-ass new mall things come and go so quickly I never know what's there, or where it is, and half the time I don't know WHAT it is because it's a weird boutique that goes under in six months. (I feel like the weird boutiques are a better fit downtown, at the redeveloped train station, or in some of the funky re-urbanized strip malls. They're just harder to discover and visit at the new mall wasteland, and I bet the rent is higher.)

I am convinced what has saved the old mall, though, is that the old mall is five to eight minutes away for most people; the new mall is TWENTY. That's like driving to MARS. GOD. Peorians routinely punk out of things if they have to drive more than 15 minutes to get there; the old mall survives solely on small town grumpiness about distance.

The new mall, being outdoors, didn't even have a Santa this year. What kind of mall doesn't have a Santa? It's bullshit.

If the old mall got a Whole Foods or a Trader Joe's I would actually suddenly shop there all the time. As fas as I can tell, the Sears and Penney's actually do a really robust business with the Mexican immigrant community here; the have multilingual staff and signage and carry some kids stuff and housewares that appear targeted toward that market. I'd be sort of curious to read an article about department stores chasing that market and how well they're doing. Like, JC Penney furniture is pretty decent, better than you can get at Target, and cheaper than a just-furniture store, and there's no Ikea nearby; an immigrant community with limited awareness of online shopping and limited desire to drive three hours to an Ikea might find that very attractive, especially when they can shop in Spanish. I'm just curious.
posted by Eyebrows McGee at 7:07 PM on December 23, 2015 [9 favorites]


This is as good a place as any to mention the American Dream Meadowlands, with its proposed indoor ski slope and London Eye-esque ferris wheel.
posted by jason's_planet at 7:07 PM on December 23, 2015


I'll start going to the mall again when it incorporates a train/subway station. I don't want to ever take my car to a giant traffic mess of a mall parking lot again. Hassle > benefit.
posted by ctmf at 7:16 PM on December 23, 2015 [2 favorites]


This has happened to the malls here. The really high end mall is going gangbusters, the middle class malls are dead or dying. The thing is, though, those same middle class malls are surrounded by Big Box developments that are doing just fine. The middle class is still shopping plenty, but they're not going to the Apple Store in the fancy mall, they're going to Best Buy. They're not going to Armani, they're going to Target or TJ Maxx. For selling goods at prices low enough for the middle class to afford while keeping your brick and mortar establishment, the Big Box model of high volume and low service reigns supreme. And you can't have those in traditional malls, at least not until someone opens TARDISmart.

Also: cities are gentrifying and the suburbs are reversing. The fancy mall just randomly happens to be located in one of the suburbs that is still upper middle class. There are a lot of other suburbs, mainly to the east of the city, that have completely flipped over to poor or working class and mostly black, as those folks get pushed out of the gentrifying areas of the city.
posted by soren_lorensen at 7:44 PM on December 23, 2015


The middle class is doing just fine. They just buy shit from Amazon. For higher end things you generally want to try it on or be talked into buying it by a person.
posted by pravit at 7:53 PM on December 23, 2015 [3 favorites]


cut a deal with the zoning people

This is a hell of a Step 2.
posted by en forme de poire at 8:18 PM on December 23, 2015 [4 favorites]


Especially since most places it'll reduce the tax base and increase city expenditures.
posted by Mitheral at 8:36 PM on December 23, 2015


Haven't been to a mall in years. I used to go to Houston's Baybrook, and they are exactly in that suffering middle. Interesting thing about that mall is that it had two bookstores, plus three more within walking distance. All gone except for the B&N on the other side of the freeway.
posted by Beholder at 8:46 PM on December 23, 2015 [2 favorites]


Seems to me here in L.A. malls where rich people shop are teeming with middle class people. Even poor people.

Malls where poor people shop are teeming with middle class people, too.

Being L.A., I've seen a few places where rich people shop. I mean real rich people. Those places are another world.

I'm kind of confused about what makes a middle class mall. Stores like JC Penny, Sears, etc, spent decades trying to make themselves obsolete, even before the internet. Plenty of middle class people have no problem shopping at Target and Walmart, even if those places are thought of as being on the poor end. I guess I'm at a loss imagining what a strictly middle brow mall would look like, other than perfectly bland.
posted by 2N2222 at 11:12 PM on December 23, 2015


Peorians routinely punk out of things if they have to drive more than 15 minutes to get there;

Weird, I thought you were talking about Peoria AZ and thought "that doesn’t seem right". Surprisingly I couldn’t really tell from the rest of the post.
posted by bongo_x at 11:31 PM on December 23, 2015


Seems to me here in L.A.

Angelenos drive insane amounts; they talk about routes the way the French talk about food.

The article better describes generic mid size cities that did the white flight to a ring of suburbs back in the day, which then reversed and so on.
posted by sebastienbailard at 3:00 AM on December 24, 2015 [2 favorites]


"they talk about routes the way the French talk about food."
Dang.
posted by Don Pepino at 6:53 AM on December 24, 2015


Angelenos drive insane amounts; they talk about routes the way the French talk about food.

Show up to someone’s house or meet someone, one of the first things you talk about will be which way you drove and how the traffic was.
posted by bongo_x at 7:57 AM on December 24, 2015


I appreciated the case study in the article, because this pattern is so painfully obvious in Atlanta. But they didn't even use the most extreme examples. Next door to Lenox, the fancy mall in the article, is Phipps Plaza, which features only boutique stores that I have never heard of. And Northlake is not the saddest formerly middle class mall. Right by us is North DeKalb Mall, where the anchor stores are no longer department stores, but discount stores: Marshall's, Ross, and Burlington. Until this week, there was a Macy's, but it closed.
posted by hydropsyche at 8:50 AM on December 24, 2015 [1 favorite]


The one outdoor mall we have nearby in Toronto seems to do pretty well. It took a pretty crappy mall (Don Mills Centre) and went slightly high-end and outdoor. The only opposition to the conversion was from local seniors who would lose a place to walk in the winter. I wish we could have covered shopping arcades like they do in parts of Japan - you're protected from the worst of the elements but are still walking down a street/sidewalk with tons of distinct small shops and not a mall with the same shops as every other mall.
posted by any portmanteau in a storm at 10:35 AM on December 24, 2015 [1 favorite]


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