The Southlands shopping center in Aurora, Colorado isn’t its usual busy self, but it’s hanging in there.
“It is a different environment now at Southlands; it’s not certainly what it was pre-COVID-19. But, you know, the environment at Southlands really lends its self with that open air setting for people to come out and be out,” said Joyce Rocha, marketing manager for the mall.
Rocha says because they have grocery stores and restaurants, many of their stores have been able to stay open and that’s helped everyone financially.
“We have so many essential businesses there. Southlands really has officially been open throughout the whole time here,” said Rocha.
But not the case for many other malls across the country. A recent report from Moody Analytics showed mall vacancy was at it’s highest rates in 20 years. That was before COVID-19 hit.
“Retailers on the ropes being pressured by the rise of online commerce and the shift of really more consumer spending forcing a lot of their goods and services online,” said Victor Calanog, the head of commercial real estate economics for Moody Analytics.
Brick-and-mortar retail is taking hits from all sides during this shut down.
“Retailers and therefore retail property land lords were really hit with that one, two punch of significantly reduced demand. The second punch was really mandated store closures,” said Calanog.
A big reason for the decline: online shopping has exploded.
Target, which operates almost 2,000 stores in the US, says online sales jumped 141 percent in the first three months of 2020. Amazon, which only operates online, saw a 26 percent jump in revenue during the same time.
“Think about the kind of numbers that Walmart or Amazon are posting because they seem to be better prepared to handle this kind of change,” said Calanog.
While that’s good for online retailers, it could be a huge blow to malls.
JC Penny, Pier 1 imports, Nieman Marcus, J Crew and more have already filed for bankruptcy during the pandemic.
“Sure, we’ll burn out the virus in a month or six weeks or so. We’ll reopen and everything will be fine. Everything will bounce back," said Calanog. "I think a lot of folks are realizing that the effects might actually be a little bit more permanent, given that a lot of retailers are permanently closing shop and rehiring. Just won’t be as much of a automatic bounce back as many of the optimists hoped it would be."
Rocha says times are tough but the Southland mall’s rebound has already started.
“As these restrictions have started to relax, just already over the course of the last two weeks, daily we get notifications from our tenants that they will be reopening,” said Rocha.