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Experts Warn Of Looming Mall Closings

Posted On: 2/12/2013

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TAGS: vending locations, bulk vending, vending operator, bulk vending location, mall trends, mall closures, retail news, Financial Times, Gerry Mason, Savills

A story in the Financial Times is causing concern throughout the retail industry. In a report appearing in the Feb. 4 edition of the London-based paper, leading real estate and financial advisors predicted that as many as 200 regional malls in the U.S. are in danger of going out of business within the next five years. Gerry Mason, executive managing director of Savills, a property group, was quoted as saying the market for regional malls is "15% to 20% overbuilt."

High-risk locations include the nation's 1,300 regional malls, which occupy 450,000 square feet; the figure does not include "megamalls," larger complexes that usually anchor attractions like movie theaters and bowling alleys. Closure risks could spell bad news for some vending operators, particularly those in the bulk segment, who are reliant on mall locations.

Experts interviewed for the FT story point to the increased use of e-commerce by consumers. To date, approximately 10% of retail sales are conducted online, and that number is rising rapidly. Fourth-quarter 2012 online sales are up 14%, compared with 2011's fourth quarter, while overall retail sales rose only 3%.

Most worrisome to real estate watchers are such struggling anchor stores as Sears and JC Penney, as well as the recent announcement by the bookseller Barnes & Noble that it intends to shutter a third of its outlets over the next decade.