As American malls are forced to adapt in response to changing consumer preferences and the rise of e-commerce, landlords have increasingly turned to healthcare and restaurant tenants to drive traffic.
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A new CBRE study found that on average, department stores fill nearly half of malls' gross leasable area with apparel, while accessories typically occupy another 29%. These two categories are experiencing the slowest growth in retail at present, particularly because shoppers can purchase those products online via their computers and smartphones with ease.
Restaurants, home furnishings and health and beauty retailers are the top performers in retail, the report shows, though restaurants only accounted for 4.6% of mall GLA, and home furnishing tenants account for 1.6%. Then there is the health and personal care segment, which accounts for 1.2% of malls GLA, CBRE reports.
“The American mall itself isn’t anywhere close to dead. It’s the old mall model that is dying," CBRE Americas Head of Retail Research Melina Cordero said in a release. "Converting malls’ tenant bases to include more of the categories that in-person shoppers now favor won’t be an easy or quick fix. But it is a necessary evolution for the mall industry to maintain its place as a cornerstone of American retail."
Some mall owners are catching on to the trend and buying out department store leases in order to repurpose the space to function as a restaurant or specialty store. According to CBRE, this allows landlords to lower the risk of e-commerce penetration while working with higher-growth categories.
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