The Solomon Pond Mall in Marlborough in March 2019. Photo by JJBers / Flickr / CC BY 2.0
Massachusetts residents may still be under stay-at-home advisories, with the exact terms of business’ reopening still to be determined, but Americans elsewhere are getting their first taste of what pandemic shopping looks like at their local mall.
Simon Property Group, the nation’s largest mall operator, reopened several dozen shopping centers across Texas, Georgia and roughly 10 other states between Friday and Monday.
There, a new reality is on display: Play areas and water fountains are off limits. Employees wear masks and shopping in groups is banned. Shoppers can also get their temperature checked for free on the premises.
Among other changes: Every other urinal and sink is taped off, and there’s ample space between seating in the food court. Simon also has technologies that will make sure occupancy will not exceed one person for every 50 square feet.
But despite all the safety measures, the question remains: Will anyone come?
“There are still a lot of people who are scared,” said Jon Reily, global head of commerce strategy at Isobar Global, a global digital agency. “The tricky part for malls is finding that sweet spot. Yes, you can come here and yes, you can be safe.”
Slow Start for Some
So far, the early signs haven’t been encouraging, with stores in many malls still closed and foot traffic light.
Lawrence Gostin, a public health expert at Georgetown University who has been consulting businesses and governors on reopenings, agrees that it is too soon. There first needs to be a “long-term verifiable significant reduction” in cases and ample virus testing and contact tracing, he said.
And shoppers should be required to wear masks, he said.
“Malls are inherently risky places for transmission of the coronavirus by design,” he said. “They are there to have a lot of people congregating among each other and among the staff.”
Given so much uncertainty, many major national mall operators have held off on announcing reopening plans and are weighing safety protocols while waiting for stay-at-home restrictions to be lifted.
Even before the cornonavirus pandemic, malls were grappling with a shift to online retail as well as shoppers who’d grown bored of department stores and specialty chains like The Gap. That resulted in a number of bankruptcies and liquidations of stores.
The coronavirus has brought further peril by derailing consumer spending and scaring off public gatherings.
Closures, Shrinkage Expected
Jan Rogers Kniffen, a consultant to investors in retail companies and a former retail executive, now expects that 500 of the 1,000 malls in the U.S. will either close or be unrecognizable in two years. Before the pandemic, he expected 300 to shutter by 2030.
The imminent demise of several key tenants could also leave shoppers with fewer places to spend. J.Crew, saddled by debt, filed for Chapter 11 on Monday, becoming the first major retailer to do so. J.C. Penney and Neiman Marcus are also expected to file for Chapter 11.
And Macy’s CEO Jeff Gennette told analysts Thursday that it would emerge from this crisis as a “smaller company.” That’s bad news because department stores represent 60 percent of mall anchor space, according to research firm Green Street Advisors.
Macy’s reopened nearly 70 stores Monday, with many just focusing only on curbside pickup. Gennette said he expects less than 20 percent of the business to come back at first. And shoppers will notice a lot of changes: The chain is banning spa-like services, as well as bra fitting and ear piercing. For clothes that have been tried or returned, workers will take them off the sales floor for 24 hours.
Higher-end malls are expected to survive the crisis because owners like Simon, which operates 200 properties in 37 states, have enough money to cover losses. A Simon spokesperson declined to comment.
There was already a growing gap between the high- and low-end malls. While vacancies at top malls have remained tight at 2.7 percent, the bottom-rung of malls are struggling with an average vacancy rate of 7.9 percent as of the first three months of 2020, according to Kevin Cody, senior consultant at CoStar Portfolio.
“It’s really a tale of two cities,” said Steve Dennis, president and founder of SageBerry Consulting, a retail consultancy. “[The crisis] really pushes the extremes further apart.”
William Taubman, chief operating officer at Taubman Centers, which operates such high-end centers as The Mall at Short Hills in N.J. and Beverly Centers in Los Angeles, said he believes the carnage in stores in communities will only fortify business at malls like his. He feels heartened that Taubman’s mall business in South Korea is exceeding sales prior to the pandemic. In China, business is “not quite there but almost there.”
Taubman said he thinks many are interested in getting out but “they may come less frequently.” He expects spending will be higher for each trip.
