About the Placer.ai Mall Indexes: These Indexes analyze data from more than 100 top-tier indoor malls, 100 open-air lifestyle centers (not including outlet malls) and 100 outlet malls across the country, in both urban and suburban areas. Placer.ai uses anonymized location information from a panel of 30 million devices and processes the data using industry-leading AI and machine learning capabilities to make estimations about overall visits to specific locations.
The lingering challenges posed by inflation and high gas prices made a demonstrable impact on the mall sector throughout the summer. After experiencing a steady run of consistent year-over-year (YoY) growth, the Placer.ai Mall Indexes saw visits down across indoor malls, open-air lifestyle centers and outlet malls segments in June and July.
Yet, there was optimism that a more favorable YoY comparison and an improving retail environment could buoy the segment at the end of the Back-to-School season. So how did malls perform in August 2022?
The indoor mall and open-air lifestyle centers indexes both saw increases in the visit gap when looking at visits compared to 2021. The indoor mall gap increased by 1.1% between July and August, while the gap for open-air lifestyle centers increased by 0.9%. This shows the ongoing effects of wider economic headwinds and the limitations they have placed on retail visits, but also the unique strength of the brick and mortar retail environment in 2021 that serves as the comparison.
On the bright side, the YoY visit gap for outlet malls declined by 1.1%, the first positive movement for this segment since April 2022. The shift serves as the latest indication that the ongoing impact of high gas prices could be dissipating – an effect that had a particular impact on outlet malls.
In addition, foot traffic declines for indoor malls and open-air lifestyle centers also require context. The difficult comparison to a uniquely strong 2021 alongside the unique challenge of facing a variety of economic headwinds were always going to present a significant obstacle for August 2022 visit numbers. However, even with those issues, visits were only down 4.3% and 2.3% for the two formats respectively – a sign of continued relative strength, especially when comparing to certain retail segments that were traditional mall anchors. This indicates that steps malls have taken to diversify their tenant mix and push for more experience and dining oriented options are resonating with audiences.
Signs of a Rebound
And while the monthly view paints a picture of overall struggles, diving into a weekly view indicates a far more positive situation. All three segments ended August on a high note.
On the week beginning August 22nd, indoor malls and open-air lifestyle centers had their strongest week compared to 2021 since the week beginning June 27th, with visits to open-air lifestyle centers up 3.0% YoY. Outlet Centers – which saw visits down just 0.5% that week – showed its strongest YoY performance since the week beginning April 18th.
With Labor Day weekend ahead and the three mall segments all trending in the right direction, there is real reason for optimism. The sector could be en route to a recovery from the unique effects of the economic headwinds that have limited retail performance in 2022. The timing, ahead of a critical holiday retail season, could mean that malls and their tenants end 2022 on a high.
How will malls end 2022? Visit Placer.ai to find out.