Malls Struggle to Keep Pace with Online Shopping Boom


Retail experts warn that a quarter of all malls in America will close in the next five years.  That amounts to roughly 300 of 1,100 malls that currently exist in the U.S. 

Dr. Scott Sonenshein, the Henry Gardiner Symonds Professor of Management at Rice University, says the problem is two-fold.  “One is obviously a large uptick of e-commerce which is continuing to grow at double-digit rates, but a lot of a stores that have traditionally anchored malls are closing down stores,” he says.

That allows smaller stores to renegotiate their lease at a cheaper rate.  Now mall owners are forced to get creative to keep the property afloat.

“A community college has bought malls, they're trying to find new purposes for this space, even health care has been expanding to some of these malls,” says Sonenshein.

While luxury malls like the Galleria continue to flourish, Willowbrook and Baybrook are beginning to feel the pinch.

“The problem that mall operators are facing, whether they're running a facility indoors or outdoors, is what's bringing in the traffic right now if people have less of a need to come physically shop at the department store, then while they're there stop at a restaurant or discover a new specialty store?”

However, Sonenschein points out Amazon's purchase of Whole Foods and the company's move toward more brick-and-mortar locations.


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