Who Hijacked Our Country

Saturday, March 28, 2009

Local Businesses Are Sucking The Life Out Of Our Shopping Malls

A few decades ago, everyone was worried about the “Malling of America.” Downtowns were turning into ghost towns because everybody was shopping at the mall. And the country became so homogenized and standardized, every place started looking the same. A suburb of Chicago or Seattle, a small town in Kentucky or Utah — everywhere you look, you see the same shops and fast food places.

And now, with chain stores dropping like flies, the mall could be on its way out. Some of these casualties include “anchor” stores — well-known department stores that draw shoppers into the mall.

The chairman of a national retail consulting and investment banking firm said: “It's an absolute disaster. What a mall represents is discretionary spending, and discretionary spending is in a depression…Without the anchors, there is no mall.”

Last summer’s gasoline prices got this trend started. It got so expensive just to drive to the mall, people started shopping at those boring local mom-and-pop stores that they used to ignore.

The economic meltdown is bad news not only for the chain stores, but also for the developers and owners of shopping malls. When an anchor store goes vacant, the entire mall is threatened. You’re not gonna believe this (it was news to me anyway), but anchor retailers are actually PAID by the mall owner to be tenants at his mall. Nice work if you can get it. (Well, it used to be.)

A real estate advisor said: “If the big guy closes up, then none of the little guys are going to get the business. There will be precipitous closings of stores within the lower-tiered malls.” Share prices of the country’s second largest mall operator — General Growth Properties — have fallen below a dollar.

As terrible as this depression is, there might be a few silver linings. When we recover, maybe — just maybe — our values and priorities will be a little more grounded. Urban sprawl, people buying stuff they can’t afford and don’t need so they can impress people they don’t care about — R.I.P.

Now that the house of cards has collapsed, let’s replace it with something more solid.

cross-posted at Bring It On!

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Blogger Demeur said...

I see commercial delinquency rate is double what it was in September. Not to be a blog whore but I get a lot of good info here:

March 29, 2009 at 1:00 AM  
Anonymous Bee said...

Around 1980, my family moved from Maryland (just outside of DC) to Fredericksburg VA, and Fred was one of those norman rockwell'esque towns. On the main drag "downtown", were JC Penneys, Leggetts (now defunct), Woolworth, and a drug store with a soda fountain. About a year after we arrived, the mall opened. And Penneys, Leggetts, Monkey Wards, etc. moved to the mall. That main drag literally died overnight. The soda fountain and a movie theater were still open, but that was about all. Then the antique stores started to move into the old storefronts, and sometime in the late 90's, that main drag became an antique extravaganza. And I hear that's dying now, given today's econ climate. So what's my point? I dunno. I'm not hip on malls, they're mostly full of useless over-priced crap. However, given that the population has...what, doubled??...since 1980, I don't see the quaint little storefront shopping experience coming back anytime soon, at least to most places.

March 29, 2009 at 7:39 AM  
Anonymous Carlos said...

I say let 'em close. The malls around here, except for one really nice outdoor mall, are pretty much just magnets for riff raff.

March 29, 2009 at 8:48 AM  
Blogger Randal Graves said...

The mall in my town is going through the same thing, and though I feel bad for the low-level shlubs, I'm glad to see it long-term. We really do need to funnel our bucks to local mom and pops whenever possible.

Knock 'em down and put up a damn park.

March 29, 2009 at 9:37 AM  
Blogger Mauigirl said...

Agree. I would be happy to see the end of all malls. Then we'll have to figure out what to do with these vacant decrepit monuments to materialism. But I'm sure we can come up with something. Maybe even some green open space!

March 29, 2009 at 11:38 AM  
Blogger J. Marquis said...

Interesting point about malls paying certain stores to locate there.

I do think this economic situation will give small businesses a chance to come back. Kind of like a forest fire might kill big trees but also opens up room for new growth.

March 29, 2009 at 12:26 PM  
Blogger Lew Scannon said...

The mall culture, while not only damaging to local economies, is also not sustainable, and therefore unneeded.

March 29, 2009 at 12:32 PM  
Anonymous Anonymous said...

When I heard about some big stores like Circuit City going down I had hoped that some malls could start getting in and working in local stores so they don't all look the same, and really help the local economy.

Which means not being so snobbish, and seeing some realistic rents which could still show some realistic returns (I also didn't know about big stores being paid, I just figured they got incredible tax breaks like most Wal-Marts) and be friendlier to the community, especially in the restaurants.

For all they tried, Malls tried to be everything to the community but when everybody has restrictions and has to close by a certain time then you lose that service.

But like the others I also agree doing away with them (maybe turn them to green manufacturing plants or transit hubs or prisons <--- just kidding) would be the best idea.


March 29, 2009 at 3:20 PM  
Blogger Demeur said...

It's a double edged sword. Mom and pop stores are nice but they don't hire 50 or 60 people to operate. I don't like the cookie cutter mall stores anymore that the next guy but what's the solution.

March 29, 2009 at 5:15 PM  
Blogger Tom Harper said...

Demeur: Interesting link. As far as mom and pop stores vs. the chains, it’s true that the locally-owned stores don’t create as many jobs. But when a chain closes, it takes a lot of people with them. For example, Gottschalks Department Store. They’re about to go under. I live near one of them, and when it goes, there’ll be a whole city block that’s vacant. (They’re actually located in town and not in a mall.)

Bee: I’m not sure if the death of the mall will help downtowns and local businesses, but it can’t hurt. Last summer there was an article about high gas prices and how they were helping local businesses and also local fairs, festivals, events. People couldn’t afford to drive to the mall any more, and they couldn’t afford a long trip on their vacations, so they were starting to shop locally and check out local events that they didn’t bother with before. But maybe the economy has put a damper on this too.

Carlos: My sentiments exactly. I feel sorry for everyone who’s losing their job, but these malls put a lot of people out of business when they were built. Things are coming full circle.

Randal: Yeah, I think this will be beneficial to everybody in the long term. I know it sucks for the people losing their jobs, but ultimately we’ll all be better off.

Mauigirl: “vacant decrepit monuments to materialism” — good description. It might even be worth keeping a few empty ones, just so future generations can look at them and learn from our mistakes, and go “OMG, there used to be thousands of these places; they were the focal point of everybody’s life.”

J: Interesting comparison with forest fires. I was in Yellowstone in 1991, 2 or 3 years after a huge fire. It was really pretty, in an eerie sort of way. Among all these dead burnt trees there was a thick green carpet of ferns, new shrubs and saplings, etc. Out with the old, in with the new.

Lew: Exactly. Not sustainable and not needed.

Erik: Since the Prison-Industrial Complex is practically the only segment of the economy that’s still growing, maybe some of these empty malls actually will become prisons :)

March 29, 2009 at 8:03 PM  
Blogger Snave said...

Our town doesn't have a mall per se, but it does have Mall-Wart. That has virtually killed our downtown. One new downtown business I believe will survive the economic hard times and will survive the local Walton Sham's Club thingie is a new brewpub. The beer is tasty, and the food is excellent. I read something recently that said people continue to drink in good or bad economic times, so... the Mt. Emily Ale House will probably make it.

If things indeed get worse before they get better, I'd have to predict that a lot of major "anchors" will indeed fold or go through some extreme makeovers.

I like J. Marquis' analogy, and I also think Lew is correct... do we really need a mall culture? Then again, Demeur asks an excellent question.

March 30, 2009 at 3:05 PM  
Blogger Tom Harper said...

Snave: A town without a mall, La Grande is lucky. But it sucks that Wal-Mart has strangled everybody else. I hope that brewpub keeps thriving. I read that liquor store sales are about the same. People are buying slightly more alcohol but they're switching to cheaper brands.

Downtown Port Angeles isn't doing too badly. Several longtime businesses have closed, but a few new shops have opened in the past few months too.

I hope we've already hit bottom, but who knows?

March 30, 2009 at 3:44 PM  
Anonymous S.W. anderson said...

Tom, that's an interesting take but there's another outcome that's at least as likely. It's that even more people will flock to Wal Mart because it's all they can afford. That in turn will make Wal Mart bigger, even more powerful and omnipresent, making for more situations like the one Snave describes in his community.

That, of course, wouldn't be helpful for mom-and-pop retailers, and would do more to proliferate homogenization than having more shopping malls.

I actually enjoy crawling a decent mall at times. However, I realize the high lease rates they charge result in generally higher prices.

March 30, 2009 at 6:05 PM  
Blogger Tom Harper said...

SW: That's true, this could go either way. When I did this post I was partially thinking of an article I read last summer about high gas prices and how they were helping local businesses, because people couldn't afford to drive to the mall.

But it could be that the economy will wreck this trend too, along with malls.

March 30, 2009 at 8:09 PM  
Blogger DB said...

I am not as versed on this issue as it seems many others are, but maybe I am from a different generation as going to a mall seems so...1990's. I suppose my personal "online materialism" is contributing to the problem. I think the internet hurts malls as much, if not more, than the malls hurt the mom and pop shops who are the real victims in all of this.

I like that Reno has invested in (revitalized) our downtown district by developing the river area to make it more appealing for people to visit which benefits the small stores near there. Instead of a huge department store being the main attraction, the city has created a park and outdoor atmosphere that draws the people instead of consumerism drawing them. Consumerism gets to be the side-effect with small business' benefitting. I don't know the specifics, but that is my perspective on it.

I am not sure what is in store for the city in the long run, but I think mom and pop shops are becoming a relic of the past and malls are headed in that direction as well.

March 31, 2009 at 7:15 PM  

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