More People Are Going To The Mall To Eat At The Food Court, Not Shop, UBS Says3 December, 2019 / Articles
More and more people are going to the mall to eat at the food court, not to buy clothes, according to a survey from UBS.
The investment bank said apparel spending continues to move online, away from bricks-and-mortar stores, with about 25% of total apparel sales in the U.S. taking place on the internet today. It expects that to grow to 31% by 2023.
“Shoppers say they increasingly go to the mall to eat at the food court or just hangout instead of visiting a big box store,” analyst Jay Sole said. “Since the mall is no longer the place consumers discover fashion, it makes sense the reasons they visit the mall are changing… For the sixth straight year, U.S. consumers say the availability of online shopping is causing them to visit large regional and outlet malls less.”
UBS expects the shift will hurt department store chains, such as Macy’s and J.C. Penney, more than anything else. It said “disruption” in the apparel industry will go on for “at least the next five years.”
In its survey of more than 2,500 consumers, UBS said the percentage of people who go to the mall to shop at department stores fell to 20% this year, from 25% a year ago. It said the percentage who go to the mall to eat rose to 7% from 4%.
Additionally, Sole explained younger shoppers are leading the changes.
UBS said it found people between the ages of 18 and 34 buy more clothes online than older generations. It said apparel shoppers ages 18 to 24, for example, are spending 38% of their apparel budgets online this year, up from 32% in 2014.
“The internet has fundamentally challenged malls’ value proposition,” Sole went on. “The mall, in the past, was a great aggregator. It was a one-stop-shop where consumers could see everything happening in the world of fashion. Today, the vast majority of fashion discovery happens online… Consumers don’t need the mall to help them figure out what is cool.”
Mall owners are starting to realize this, however. They’re not ignorant to the shifting consumer preferences.
Some of the biggest mall owners in the U.S., such as Simon Property Group, Taubman and Unibail-Rodamco-Westfield, are investing in new food hall concepts, as they increasingly devote space at their properties to entertainment uses and dining.
The new American Dream mall in New Jersey, once it is complete, will be 45% retail shops and the rest of the square footage will be devoted to eateries, theme parks, a ski slope, miniature golf and an ice rink, among other things for visitors to do. Sole said in his Tuesday note that he thinks this particular Triple Five Group development can be a success.