American Has Too Many Malls

Topics: Retailing, Shopping mall, Shopping Pages: 2 (563 words) Published: June 29, 2013
America has too many malls.
Many traditional brick-and-mortar retailers are being threatened with "economic destruction" by their online competition. I’ve had the opportunity to spend some time looking at this issue, and I believe we’re seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate and will continue to do so. Online retailers are relentlessly acquiring success in many retail categories. As a result, many offline businesses are fighting to survive for their economic life. A number of physical retailers have already succumbed to online competition including Circuit City, Borders, CompUSA, Tower Records and Blockbuster. Many other physical businesses are also showing signs of serious economic distress. While many of these large businesses collapsed due to their inability to compete online, The shopping mall is also in danger from the "online shopping revolution." Many malls are closing stores by the thousands, and there are few large physical chains opening stores to take their place. The recession in 2008 was the catalyst for bringing down many of these businesses, but competition from online retailers continued the financial difficulties for many offline retailers. The mall business isn't economically healthy either. Most professionals understand that profound changes are afoot. Don Wood, CEO of federal realty investment trust, says "there is too much retail supply in this country." The wall street journal reports: green street advisor (forecasts) that 10 percent of the roughly 1,000 large malls in the U.S. will fail within the next 10 years …. That's a conservative estimate. Many mall CEOs predict the failure rate will be higher. I agree with the above perspectives. A report from Co-Star observes that there are more than 200 malls that have vacancy rates of 35 percent or higher. This is a "clear marker for shopping center distress." In short, These malls are becoming ghost towns. They are not economically...
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