The Real Retail Apocalypse Is Here As Mall Traffic Plummets, Chain Restaurants Push Back On Rent
After U.S. leaders sounded the alarm on the growing coronavirus threat, traffic at 10 major U.S. malls plummeted, and a few major restaurant chains announced plans to skip their monthly rental payments.
Subway reportedly told landlords the firm may withhold or reduce its monthly rent if civil shutdowns impact the fast-food chain, Fortune reports.
Aside from casual and fast-food restaurants, America's major shopping malls are one of the hardest hit asset classes in the midst of the virus scare.
Traffic was down at least 30% in the second week of March compared to a year ago at six of 10 major U.S. shopping malls analyzed by data analytics firm Placer.ai.
The remaining four locations saw year-over-year traffic fall somewhere between 7% and 27%, according to Placer.ai.
"With multiple cities beginning to close all nonessential stores, a severe traffic decline is imminent. And, with full lockdowns looming, shopping malls should prepare for a full traffic stop," Placer.ai's Jocelyn Bauer wrote in a report.
In Dallas-Fort Worth, the Galleria Dallas closed its doors this week to combat the spread of the coronavirus. Prior to its closing, the mall had already witnessed a 36.6% year-over-year drop in traffic in the second week of March, Placer.ai said.
The Westfield San Francisco Centre shopping mall experienced the steepest year-over-year decline in the second week of March, as patron traffic dropped 46.5% from March 2019.
New Jersey shopping venue The Mall at Short Hills saw a 40% drop in traffic.