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Newsweek Says Malls Are 'Dead'; Operator Disagrees

Posted On: 12/30/2008

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PUNTA GORDA, FL -- A recent article in Newsweek magazine predicted the death of the American shopping mall. The reasons for the demise, according to the journalist, include a sluggish economy, bad business models and a decline in key population groups. The story even pointed to the website, which has been documenting the mall-death phenomenon online. And according to one source cited in the story, last year marked the first time in half a century when not a single mall opened anywhere in the country. The story, unrelenting in its retail doom and gloom, painted a vivid picture of suburban ghost towns.

There can be no denying the downward trend in retail sales, but is the mall really dead? This is a serious question for many bulk vending operators, who in the last decade have found malls across the country growingly accepting of bulk equipment, letting it migrate from vestibules to the main concourses with their highly profitable foot traffic. Assisted by new equipment designs and concepts, operators have finally found a place in suburbia's climate-controlled "town square." That malls seem to be dying, just as bulk vending has gained ideal positioning within them, comes off very much like the cruelest of jokes.

However, according to Larry Freshman of Kworterz Vending Inc. (Punta Gorda, FL), the Newsweek journalists were a premature in writing the obituary for America's shopping centers. "I think with the economy as it is, they've all slowed down some, but if you pay attention to what your customers want, you'll do fine," Freshman said. "We just got in two more truckloads of equipment from Northwestern that we plan on putting out. Just because retail sales are down doesn't necessarily mean bulk vending sales are down."

Freshman, whose company operates in 50 malls throughout the Southeast, has observed an increased trend toward higher-quality vendibles. Malls are evicting operators who don't maintain equipment or are unwilling to provide displays that fit into the overall décor. Freshman's company specializes in malls, and has earned a solid reputation for matching equipment and cabinetry to a location's aesthetics.

"We'll build, stain, lacquer or paint stands for a mall's specifications. That's what the malls want right now. They're looking for a guy who can provide something special and not have someone who just pulls equipment out of a box," he explained. "And malls are throwing out operators who don't take care of their equipment. We just opened up in five new malls with 17 new displays last month."

Also missing from the article, as Freshman and others point out, is the evolving nature of malls. So-called "lifestyle centers" are increasing in popularity. Primarily located in the sunshine states, these venues are compact, offering fewer retail outlets and outdoor concourses along with landscaped grounds. Decidedly more upscale than typical malls, they have been filling a niche for specialty shops and higher-end retailers.

According to reports from the field, operators have had some success placing equipment in these new shopping centers, particularly in individual stores. As with traditional malls, these locations require that equipment match the overall décor.

So, where is all the doom and gloom originating? According to Freshman, much of it is overblown, with little basis in reality. "People love to be doom mongers. I wish these newspapers would just shut up," he said. "People still go to the malls, and yes, they are still spending quarters."