Mall's Doomsday?

Malls Survived The Retail Apocalypse,
But Coronavirus Threatens To Be Their Armaggedon

Retail faces a doomsday scenario of biblical proportions now. Major national retailers largely ignored the prophetic warnings of the retail apocalypse and now face the final battle that will occur in the nation’s 1,200 malls, retail’s Meggido.

Already, RetailNext reports that 97% of the 450 brick-and-mortar retail executives it just surveyed have closed some or all of their doors. How many of those stores are located in malls is undetermined, but it stands to reason that a vast majority have significant mall exposure, since malls are filled with non-essential retail businesses which have been forced shut vs. essential ones that have remained open.

Facing another month of closures, 96% of the retailers surveyed are seeking rent abatement from landlords. At least one major mall owner, Taubman, has publicly nixed any such concessions in a letter to tenants.

And there remains another wildcard: many malls may not be able to open at the end of April depending upon local conditions. Since the coronavirus threat appears to be greater in high population areas – just the kind of places where malls are located – malls may face extended closings in local communities.

As of mid-March Coresight Research expects 15,000 stores to close permanently in 2020, but it could go even higher depending on the duration of the coronavirus.

Malls to become do-not-enter zones afterward

Social distancing has become the new normal for the American way of life and given people’s rising awareness of the threat to gathering in indoor spaces with crowds of people, it is likely that indoor malls are going to be the last place people will want to shop post-coronavirus.

A Coresight survey conducted March 17-18 among some 1,200 consumers found that malls are at the top of the list of places to avoid if the outbreak worsens – which it surely will – with movie theaters and restaurants not far behind.

For a whole host of reasons, I believe shoppers are going to avoid malls “like the plague” once the immediate COVID-19 threat subsides.

And public health officials warn it may re-emerge with a vengeance come fall unless a vaccine is found or enough of the population develops immunity naturally through exposure to the virus, what is called “herd immunity.”

If this eventuality occurs, retailers’ Christmas 2020 is shot, along with the first four-to-six months of the year.

See the full article on fortune.com