The Decline of American Shopping Malls

Why is there a decline of shopping malls in America?

The American shopping mall is dying. It was once a status symbol in the American shopping world and attracted thousands of people with the department stores. Families went on trips to the malls, met up with friends and young people spent their free time there. Especially the food courts were good places to sit together and chat. This magic only exists very occasionally now, because there are fewer and fewer malls in the USA. Researchers assume that the number of malls will continue to fall drastically. For example, CNBC assumes that by 2026 about 25% of the malls will be closed.

How did the shopping mall hype start?

The hype for the malls started in the 1950s after the end of World War II. The economy was booming and with the construction of larger roads, not only the big cities were easily accessible by car, but also the suburbs. This revolutionized people's purchasing behavior. There was plenty of space for many shops and the possibility of building large parking lots.

In 1954 the plan for the first large open air shopping facility was presented: Northland Center in Michigan, outside of Detroit. Just two years later, the design for the next shopping center was ready. It was planned for Edina, Minnesota. The concept was always the same. The big department stores attract the crowds and the many other shops benefit from the customers. The food court invites you to linger and the large car park makes it very easy to get to the mall by car. The number of shopping malls increased rapidly. In the 1960s, according to CNBC, there were already 4,500 large shopping centers and in 1987 the malls already accounted for 50% of all U.S. retail sales.

The Mall of America opened in 1992. It is still the largest mall in the United States. Among other things, it includes a roller coaster and broke the limits of what was previously imaginable. The dimension of this mall shows the general development of shopping malls. There are more and more malls that are also getting bigger.

At a certain point there were too many malls for too few people. More specifically, this represents an oversupply. The consequence of this is that the malls are no longer so well frequented and, in the worst case, have to close. We are in this transition today. More and more malls are closing.

Today there are about 1,100 malls in the US. Some are more successful and more profitable than others. At the moment it looks like this number of malls will not be able to exist in the future. The reasons for this are numerous and can be assigned to different categories.

The most important reason given is the changed purchasing behavior of people. While at the beginning of the malls people did their shopping in the shops, today they tend to avoid them. The reason for this is the all-encompassing presence of the Internet and the unlimited possibilities it brings. People prefer to stay at home and order their things online. This has the advantage for them that they can avoid the traffic and have it delivered directly to their home. This example directly encompasses two important reasons. On the one hand the advance of online retail and on the other hand the changing customer preferences. Both aspects have one thing in common: they indicate that things change over time and that nothing stays the same forever.

A shopping mall cannot compete on this point as it is not as adaptable. Customers may be given a choice of shops to visit, however the option to shop from home is not realised. As briefly touched on before, another problem with malls is that there are too many malls. One of the reasons for this is the tax system in the USA. It fuels the construction of the malls, but is not supportive of the businesses within them, which have to pay the rent to the mall owners. The associated economic idea of the mall owners increases the pressure on the shops. Put bluntly, this means that everyone is fighting for their own benefit. However, there is a huge imbalance here. The mall operators are forcing the shopkeepers to their knees with rising rents. While the shops go along with this, the operators benefit from rising rental income. The system behind the malls is a race for profits.

In addition to the changed purchasing behavior of customers and the obvious economic problems, there are also reasons that are not immediately obvious. The architecture of the malls is an example for that. If you look at photos of the different malls, or if you visit them, you will quickly notice that everything somehow looks the same. The phenomenon can be easily described with the following sentence: never change a running system. When it turned out that the concept of the mall with the large department stores, the smaller shops and the food court worked, it was applied to all planned malls. In today's world, this type of procedure would be referred to as copy and paste. The problem is that there are no longer any unique selling points. If there is the same thing to see everywhere, then the special feature that encourages a visit to a mall is missing. It basically doesn't matter which mall I visit as a customer. The Mall of America still has this special feature today. On the one hand, it attracts customers because it is the largest mall in America and, on the other hand, because of attractions such as the roller coaster and the aquarium.

The most recent reason for the closure of the malls is Covid-19. The pandemic has exacerbated the grievances already mentioned above. Firstly, customers are staying at home to protect themselves from contagion and the relevance of online retail continues to increase. As the process progresses, this means that the balance between malls and customers will become even more imbalanced. That leads to the second point. Due to the lack of customers, the shops can no longer afford to rent the shop space. With no support from the tax system, they have to give up their place in the mall. As a result of the vacancies in the malls, they are no longer attractive to customers. Huge empty buildings remain, for which a new use must be found in the future.

How can dead shopping malls be used for other purposes?

A mall is considered as troubling once its vacancy rate has reached 10%. Dead malls are recognised by a vacancy of 40% or higher. According to Siddique in 2021 a total of 3500 malls were dying while 20% were already considered ‘troubling’.

Once a mall is declared ‘dead’ and all the shops have moved out the only thing left is a huge vacant building and a big area of asphalt parking space that seem to have no further purpose.

Or do they?

First of all, dead mall sites account for a number of issues in their suburban communities. Those issues include “less tax revenues for the town, unappealing visual aesthetics for suburbanites passing by, and a lack of services for local residents” as Dallessandro points out. He also claims that apart from the problems that arise with greyfields of dead shopping malls those areas are usually good spaces for redevelopment projects as “the infrastructure is already in place, much site work has already been completed, and nearby developed communities can act as a built-in market for new businesses". Moreover, the areas should have good accessibility due to their existing connection to the road network. Having this in mind it is indeed possible to give a dead mall a new purpose that makes use of unused space and at the same time benefits the community.

Is there anything that needs to be considered beforehand?

Yes. Planners, designers, and municipalities came up with three guiding elements for future developments of dead mall sites that Hare summarised as the following:

Site Longevity: Malls were originally built without any flexibility to respond to changes in the market or shifts in economy.
Civic Symbolism: The location of shopping malls was typically in good eyesight at highway exits for everyone to be the first thing they see. Once such a mall died the only thing to be seen is an abandoned building instead of “a lively symbol of this community”.
A Multi-Faceted Return on Investment: While the focus of attracting mall developers used to be tax incentives, now the focus should be on “public spaces and social interaction, a stronger sense of community pride, and the resiliency to provide increasing land value from a more sustainable framework”.

Once the decision is made to renew a dead mall site the responsible party has three different options for the retrofit design which are summarised in the following chart which is based on Hare's findings:

Reinhabitation

Reuse of existing structures for more community-serving purposes.

Primary goal: Immediate return on investment for the site's owner.

Advantages: Good flexibility for a variety of new uses (provided by the open floor plans of the large anchor stores).

Challenges: Often as interim solution.

Examples: medical centres, religious and educational facilities, residential communities, recreation centres

Redevelopment

Replacing existing structues and/or building on existing parking lots.

Primary goal: Support of less auto-dependent and more socially engaged lifestyles.

Advantages: Creates compact, walkable, connected mix of uses and public spaces.

Challenges: Expensive, time consuming and complex solution.

Regreening

Demolition of existing structures and revitalization of land.

Primary goal: Transition of unsustainable design practices into a sustainable one.

Advantages: One of the most sustainable solutions.

Challenges: It will not provide the same level of investment as conventional solutions.

Examples: parks, community gardens, reconstructed wetlands

The three strategies of reinhabitation, redevelopment and regreening have been applied successfully to various mall sites in America. Some interesting projects are listed below.

Crestwood Plaza outside of St. Louis: spaces leased out to local artists and art galleries (reinhabitation) (Dallessandro)
Foothills Mall in Tuscon: live/work/play, multi-modal experience (reinhabitation) (Brown)
Uptown District in Hillcrest, San Diego, CA: mixed use centre (redevelopment) (Tietz)
The Crossings in Mountain View, CA: transit-oriented development (redevelopment) (Tietz)
Santana Row in San Jose, CA: mixed-use urban village (redevelopment) (Tietz)
Carousel Mall in San Bernardino, California: commercial and residential use (redevelopment) (Tietz)
Mizner Park in Boca Raton, Florida: serves as downtown (redevelopment) (Hare and Dallessandro)
Fairground Square Mall in Muhlenberg Township, Reading, PA: civic community complex (redevelopment and regreening) (Siddique)
Cincinnati Mall: age-in-place as the retrofit solution (redevelopment and regreening) (Hare)

Mizner Park in Boca Raton, Florida is the earliest retrofit that happened in the United States. Before redevelopments took place in 1990 the Boca Raton Mall lasted less than twenty years and was therefore replaced by Mizner Park which is now used as downtown. The original mall had 430,000 square feet of retail space and was surrounded by a large asphalt parking space. The major cause for the death of the mall was its competition with an already existing and relatively larger shopping mall in the same area. The redevelopment was therefore necessary and created a mixed use of retail, office, and residential space and also includes a museum and a concert hall. The success of Mizner Park is evident since it has already outlived the mall it replaced.

A successful case of reinhabitation is Crestwood Plaza outside of St. Louis. This mall failed due to the loss of key anchor stores that lead to losing more of the smaller stores. The reason for this were newer and more modern malls in the area. Recovery was achieved by leasing out the spaces of the existing mall building to local artists and art galleries, as well as using the spaces for offices, educational and medical facilities, and parking structures. Even though the reinhabitation was successful for a couple of years, according to Dallessandro it only worked as a patchwork solution calling for further redevelopment.

It can be seen that most of the examples mentioned in the list above are redevelopments. So it appears to be most convenient to replace the existing structures that a dead mall offers with something new. This might be the case because reinhabitation mostly works as a temporary solution and regreening makes less profit than other solutions.

Read about a case study here.

Even though a mall redevelopment sounds like the perfect solution to the dying of malls, there are also a number of problems that need to be considered in the redeveloping process. Hare has categorised these problems into physical challenges (e.g. big mall sites require a huge amount of demolition), economic challenges (e.g. often a partnership of multiple developers is required that need to invest a lot of time and money), political challenges (e.g. delays or inaction can be caused by those in power fearing their job security or image), time-related challenges (e.g. projects are often divided into phases which can be very time consuming), and demographic challenges (e.g. the site as to attract new residents as well as those who already live in the area).

Did the mall fail?

Now that many malls are dying and are undergoing major changes, we could ask the question whether the mall has failed. When the shopping mall was first established demographics of suburbia and the desires of the American population were quite different. As Dallessandro explains the mall was part of the stereotypical suburb of the 20th Century which doesn’t add up with today’s lifestyle anymore. With the increasing desire of an urban lifestyle redevelopment projects like Mizner Park are the number one solution. The key is to create a more dynamic development of transit and habitation instead of just retail and therefore secure the site’s vitality for many years.

Works cited

Baker Siddique, Abu. Rethinking Dead Malls: Reconsidering an American Vacant Mall Site as a Seed for Regrowth. Virginia Polytechnic Institute and State University, 2021.

Brown, Ian. Adaptive Reuse of Shopping Malls: Case Study of the Foothills Mall in Tucson, AZ. University of Arizona, 2020.

CNBC. „Why U.S. Malls Are Disappearing“. YouTube, 4th March 2021, www.youtube.com/watch?v=C_JiP-j2FwM.

Dallessandro, Anthony R. The Life and Death of an American Archetype: The Shopping Mall and The Suburbs. Pennsylvania State University, 2015.

Hare, Sean Michael. Returning Dead Mall Sites to Vitality through Age-in-Place Design. University of Cincinnati, 2017.

Tietz, Marissa. Carousel Mall Redevelopment. California Polytechnic State University, 2019.