Indoor Malls Outperform Open-Air Shopping Centers Despite Drop In June Visitors

Generation Z's rediscovery of the mall as a hip new place to shop, socialize and be seen has helped drive a continued increase in foot traffic to enclosed shopping centers.

Visits to indoor malls grew nearly 2% during the first half of 2025 compared to the same period last year despite a drop in shopping traffic during June, according to data from foot traffic analytics firm Placer.ai. Open-air shopping center visits grew less than 1% year-over-year, while traffic at outlet malls decreased slightly. 

Traffic dropped at all retail formats in June after consumers stocked up on items in April and May ahead of expected price increases due to tariffs. But Placer.ai, which uses cell phone data to compile its numbers, suggested that drop represented "natural demand normalization" rather than consumer weakness following the tariff-fueled shopping spree.

Despite the recovery of indoor malls' foot traffic, open-air centers are the only shopping format that has improved over prepandemic levels. Visits to shopping centers with an open-air format were up 0.3% during the first six months of 2025 compared to the first half of 2019. 

Indoor mall visits are still down more than 1% during that same time, but that was the strongest performance they have posted in that metric since 2020, which led Placer.ai to suggest the comeback of indoor malls is accelerating.

That comeback is being fueled by Gen Z shoppers, who mall industry group ICSC found visit stores in person at around the same frequency as baby boomers, and more than millennials and Gen X consumers. 

An ICSC survey found nearly 63% of Gen Z shoppers planned to purchase holiday gifts in physical stores last year, while only around half of them planned to utilize retailers' websites and apps for their items.

National retail vacancy remained near historic lows in the first quarter despite an increase to 5.5%, according to Cushman & Wakefield. Those low vacancy rates have fueled demand for retail space in malls, along with rising store revenues due to tariff-driven shopping. 

Five years out from a bankruptcy, CBL & Associates Properties, a Chattanooga, Tennessee-based mall REIT, turned a profit of more than $67M last year. And that momentum has continued into 2025 as the REIT sold three retail properties for a more than $21M gain.  

“There are new buyers that are interested in malls,” CBL & Associates CEO Stephen Lebovitz said. “I think they see the opportunity.”