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Placer.ai Mall Index - May 2023 Recap

by 
Shira Petrack
 on 
June 6, 2023
Placer.ai Mall Index - May 2023 Recap

Although consumers appear to be feeling slightly more optimistic about the economy, savings intentions remain strong – which may be coming at the expense of discretionary spending. And the clothing, footwear, and household goods categories – the bulk of items sold in malls – seem particularly impacted

But amidst the challenges, foot traffic data may be showing signs of a budding mall recovery. We dove into the May 2023 shopping center visitation patterns for Indoor Malls, Open-Air Lifestyle Centers, and Outlet Malls to get a better understanding of current consumer trends. 

Economic Headwinds Continue to Weigh on Mall Traffic 

Year-over-year (YoY) visit gaps for all three mall categories grew in May 2023, marking the fourth month in a row of expanding YoY visit gaps and highlighting the current challenges faced by retailers. Consumers – who may be waiting for prices to drop or interest rates to ease – seem to be delaying large purchases and shifting their spending away from goods and towards services, which is continuing to take a toll on the shopping center space.  

But although YoY visitation patterns tell a more challenging story, other metrics indicate that a burgeoning recovery may be gaining steam. 

Signs of a Shopping Center Recovery 

First, month-over-month (MoM) visits have remained mostly positive or flat over the past three months. And while some of the MoM increases may be due to changes in month length, the relative consistency in MoM visit numbers may also indicate that – although YoY visit gaps persist – mall traffic trends are not necessarily getting worse. 

Second, the recent trend towards more mission-driven shopping seen in several retail categories – including malls, superstores, and grocery – continued in May, with Open-Air Lifestyle Centers and Outlet Malls seeing a boost in median visit length relative to May 2022. The increase in visit time could mean that consumers are making fewer trips to the mall because they are maximizing each visit and stopping by all their favorite stores, dining concepts, and entertainment venues on each trip. In other words, the quality of visits may be increasing even as the quantity of visits stagnates. 

Outlet Malls Get Biggest Sales Event Boost

Zooming into visit patterns over recent sales events also highlights the continued value that consumers receive from malls and helps put the current traffic slowdown in perspective. Over the past year, every sales event – including more minor retail holidays such as St. Patrick’s Day – has driven significant traffic surges to the three mall categories. This indicates that people still want to visit malls – they just want to make sure that a mall trip will not blow their monthly shopping budget. 

And Outlet Malls have consistently seen the largest sales event boost, including over the recent Memorial Day weekend, which also suggests that consumers are willing to go out of their way for a mall visit that won’t break the bank. Visits to Outlet Malls during the week of May 22nd through 28th, 2023 were up 50.9% relative to a weekly January 30th through February 5th baseline, while Indoor Malls and Open-Air Lifestyle Centers saw their visits increase just 14.6% and 19.8%, respectively. 

The relatively strong performance of Outlet Malls over retail sales events indicates that consumers are not permanently abandoning malls. Instead, in the current economy, many shoppers appear to prioritize value – which could explain why Outlet Malls receive such a traffic boost during holidays, as consumers look to take advantage of the double discounts offered by the outlet format during these happenings.

With the summer months offering plenty of promotional opportunities – including critical Back to School sales – the mall recovery may well accelerate. And if recent visitation patterns are an indication of things to come, outlet malls could be the biggest winners of the upcoming season. 

For more data-driven retail insights, visit placer.ai/blog.  

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