US Shopping Malls Teeter Between Success and Failure While Asian American Malls Thrive

Mixed reports about the state of U.S. shopping malls indicate at least one thing for certain — the future of the American shopping mall is not guaranteed.

Nick Egelanian, the president of retail development company SiteWorks, which tracks mall performance in the U.S., calls what’s currently happening in the mall market a “continuation of the last phase of a 40-year decline.” As a result, “In 10 to 15 years, there will presumably be at most 150 to 200 of the highest-performing specialty shopping centers left in the country,” according to Malls.com.

Egelanian told The Wall Street Journal that “the total number of U.S. malls has declined from an estimated 2,500 in the 1980s to about 700 today,” and he believes that number will only get lower. Only shopping malls with premium entertainment, dining, and luxury stores will be able to outlast the rest.

Business Insider agreed and added that “in 2020, Coresight Research projected that 25% of the country’s approximately 1,000 malls would close shop in the following 3-5 years. In April, analysts at UBS projected that 40,000-50,000 American retail stores would shut down by 2027.”

But all is not doom and gloom.

In its The State of the American Mall report, Coresight Research shared that “physical retail has bounced back, with 2022 seeing more store openings than closures for the first time since 2016, and retail sales at malls grew more than 11% in 2022 to nearly $819 billion.”

CNN also stated that “malls are not going extinct, they are merely adapting to a new environment. In fact, many have reported robust occupancy levels and bigger crowds than before the pandemic.”

In recent years, the meteoric rise of e-commerce has led many to speculate that traditional shopping malls will become obsolete, especially for a generation deeply entrenched in the digital realm. Rather than becoming adversaries, online and offline retail experiences are complementing and enhancing each other. This harmonious integration, epitomized by the emergence of omnichannel marketing, has rejuvenated physical stores. Today’s retailers also have a unique edge — they can harness digital tools not just for proliferation but for brand consolidation.

The wild card in this discussion is the rise of Asian American malls, according to NBC News.

The Diamond Jamboree mall in Irvine, California, is fully occupied, according to leasing manager Helen Wang, while the Pacific East Mall in the San Francisco Bay Area is almost filled to capacity after recent renovations, per leasing executive John Luk. Meanwhile, Tangram mall in Queens, New York, has leased over 75% of its spaces since its opening last year, with more than 35 businesses operating and additional openings planned for the winter.

Every weekend this past summer in Orange County, California, thousands of people gathered at seasonal night markets in front of Asian Garden Mall in Westminster. This led to live performances, outdoor dancing all night, and large social gatherings. “At American malls, you kind of just go shopping,” one young shopper said. “Here you come for the entertainment.”

An associate professor of urban studies and planning at the University of Maryland, Willow Lung-Amam, said, “Asian malls have survived because they cater to a need for community.” And it’s this sense of community that ultimately keeps the Asian Garden Mall healthy. When lockdowns forced them to close, many people in the nearby communities continued buying from stores in the mall, including business owners buying from each other.

But not everything is perfect at the Garden Mall. Many customers are older-generation Asians who enjoy the lower prices, while younger generations want it to evolve into a luxury mall and less of a mom-and-pop collective.

All of this adds up to an uncertain future where shopping malls will either become part of American history or part of its thriving future.