Reports of the mall’s death have been greatly exaggerated

If you thought the days of going to the mall to nibble on an Auntie Anne’s pretzel and leave smelling of Bath and Body Works were over, think again.

According to a recent report from analytics firm Coresight Research, malls are back:

• From 2021 to 2022, retail sales at malls increased 11% to over $800 billion.
• Foot traffic at top-tier malls, where the average shopper makes $200,000+ per year, increased 12% in 2022 compared to 2019.

What’s fueling the malls’ post-pandemic resurgence? While it once looked like the rise of e-commerce would kill the mall, brands have figured out that customers want both. They have invested in “omnichannel” marketing, which promotes both online shopping and physical stores, to drive growth, per Coresight. Plus, Gen Zers might have missed the halcyon mall days of Aéropostale and Hollister, but they are mall-loyal—a survey conducted by the International Council of Shopping Centers found that roughly the same share of Gen Z respondents shopped at brick-and-mortar stores (97%) as online (95%).

Big picture: Retail is a bright spot in the otherwise dim outlook for commercial real estate. In Q2, office vacancy rates soared to a 30-year high of 18.2%, while the vacancy rate for retail space fell to 4.8%—the lowest level since real estate firm CBRE started tracking it 18 years ago. And 1,000 more stores are expected to open than to close this year.