The other day I had a chance to go out to the malls and a couple of stores in smaller shopping centers. It’s a blood bath out there! It’s funny how you hear statistics that this Holiday season wasn’t so bad with only a slight downward drop from last year. The press just doesn’t know what it’s talking about.
Let’s take some examples. Have you ever heard of an after-Christmas sale at Nordstrom? Well, it’s not an official sale, mind you, but lots of stuff has red tags on it with deep discounts (I bought a new jacket for 40% off and I waited two months to buy it hoping prices would drop). There’s even a new couple of tables with 50% off ties. ‘Never seen that before.
Let’s compare Whole Foods to Shoppers. The high-end grocers have cut their prices, in many cases quite dramatically. Just take a mosey on down to Shoppers and what will you see? Yes, the prices are low, but take a look at the people walking around and buying. What bags are they carrying their purchases in? Recycled plastic bottle bags that say Trader Joe or Whole Foods on them. It’s hilarious to see consumers switch to the lowest priced store and yet walk around with high end grocer bags.
Now on to the malls. I’m seeing something I never saw before. There are some wings or locations within a mall where inline bay tenants pay top dollar. Near a food court is one and I’m seeing some temporary tenants in those spaces! They were always the prime spaces for the major national inline bay tenants, but no more. It makes me wonder how much the current retailers have gotten the landlords to lower their rent just to keep them.
Another trend I’m seeing is with kiosks. You know, those little cart-like or small space located in the hallways in single, disconnected row. I’m seeing more vacancy there than ever with more turnover to. A few of the staples such as Orange Julius are also missing.
As for the signs, 50 to 70 percent is the norm. I walked into a well established shoe store and had to leave because they were “only” offering 25 percent off the second pair if I bought the first for full price. I don’t think so. I’d rather go to Macy’s with their 40 percent off just about everything. J.C. Penney’s has 75 percent off everything too and there are some good things for almost nothing that I couldn’t pass up.
Another indication that it’s “dead” is the utter lack of “coming soon” boarded up storefronts in the malls. There’s just no demand for expanding. The recession has been going on so long that realities has fully kicked in. After two poor Holiday seasons, there’s no optimism left in the retailers. As long as the unemployment rate continues to stay around 10 percent, it’s just not going to change. The retailers are in full survival mode and it’s not going to change.
