The International Council of Shopping Centers (ICSC) released its 2022 State of the Marketplaces Industry Report, highlighting how malls and other multi-store retail developments are transforming under challenging, new conditions while seeing foot traffic increases that are driving visits to a rate approaching those recorded in 2019.
ICSC cited Olvin.com numbers for April 2020 that demonstrated a 97% drop in visits to indoor malls as government mandates called for temporary closures. By July 2022, however, the visits had rebounded to near pre-pandemic levels, according to IVSC. Across all shopping center types, traffic is down 7%, from April 2019, a marked improvement from the 93% drop-off in the 2019 month, ICSC pointed out. Not only that, but retailers also are putting themselves on more stable footing with landlords as the 30-plus-day delinquency rate in March 2022 came in at 7.5%, or less than half the 18% rate seen during the June 2020 pandemic shutdown peak.
Store category performance indicated how consumer behavior is changing as people gather to socialize in greater numbers, with the entertainment, apparel and beauty industries benefiting significantly, ICSC maintained. Sales per square foot in the 12-month period between March 2021 and February 2022 increased by more than 207% for movie theaters, by 60% for shoe retailers, and about 56% for beauty suppliers.
Despite the positive developments, ICSC cautioned ongoing challenges remain, among them inflation, which in 2022 hit its highest level in 40 years. At the same time, consumer sentiment in the United States sunk to its lowest level in over a decade. Right now, the organization noted, inflation is the factor weighing most on consumer spending, although signs suggest easing within the next several months.
Still, bank account data shows that many Americans are significantly better off financially now than they were before the pandemic began thanks to trillions in added savings. The highest earners are the best situated. Also, compared to pre-pandemic figures in February 2020, U.S. retail sales are up 25%, not adjusted for inflation. Consumers’ comfort with in-store shopping is approaching the peak reached in summer 2021, ICSC asserted, citing a Morning Consult survey of more than 8,000 adults across the United States, Europe, Mexico, Australia and China in which 82% of respondents said they prefer to shop in-person for groceries and household goods compared with 16% who prefer to do so online.
More retailers announced plans to open stores in 2021 than any other year since 2015, according to an analysis by ICSC and PNC Bank. In fact, the more than 5,200 announced openings in 2021 roughly equaled the number of announced locations in 2019 and 2020 combined, ICSC observed.
“Data in our industry report paints a clear picture of creative retailers, resilient consumers and steadfast commercial property owners who collectively adapted to ongoing challenges to transform our industry,” stated Tom McGee, ICSC president and CEO. “We are confident that this ongoing transformation of emerging trends, services, technologies and behaviors are positive signs of a promising and profitable future for the retail sector.
