The current recession is sucking the life out of the retail sector, sending many companies to bankruptcy and putting a serious hurting on the commercial real estate market. With money becoming tighter, many shoppers are simply staying away from malls and learning to live with less as many face their own personal financial crises including foreclosures and bankruptcy.
But is it just temporary or are department stores and malls looking towards a permanent change in their future? According to an article in the Dallas Morning News, 55 percent of those surveyed said they are shopping less at malls, where prices are often much higher than online or standalone shops.
The article highlights department stores’ dismal sales:
As a group, department stores posted nine consecutive monthly sales declines through January and are forecast to post a 10.8 percent decline in February, said analysts surveyed by Thomson Reuters.
We’ve already seen the bankruptcy of several retailers and if things continue on their current course we could be looking at a permanent contraction in the retail industry. We may even see foreclosures hitting some of these malls as vacancy rates rise and shoppers stay away because of reduced income and fear of future job losses .
I don’t know if the malls are going to become extinct but we may have an increase in retail bankruptcies as well as mall foreclosures well into the future.