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April/May 2010 – Web Exclusive

A New Chapter for Malls?

Today’s version of the mall offers more than the usual retail experience.

For families, visiting the mall was an event.

by Michael Castellon

The mall – it wasn’t so much a shopping experience as a social experience. It was a hub. It was where teens meet to do, well, whatever it is teens do at the mall.

Older folks would meet there earlier in the day, taking advantage of the security and climate control to work on their cardio.

And for families, visiting the mall was an event. You could shop at dozens of stores, catch a movie and eat mounds of fast food.

The allure of the enclosed shopping mall took a firm grasp on American culture throughout the 1960s and 1970s, and hastened the death of many a downtown store.

The essence of the mall and the role it played in our lives was documented endlessly in American film. “This place has got everything,” Jake Blues casually declares from the passenger seat as his brother speeds through a mall while being pursued by police, much to the dismay of leaping and lunging shoppers, in John Hughes’ 1980 film The Blues Brothers.

In Fast Times at Ridgemont High, teens pine for love, money and social status while working at the mall, learning their first lessons in industry and maturity. The mall was often a place where lessons were learned outside of school.

In fact, it would be difficult to find anyone born after 1970 that didn’t have a mall play a supporting role in his or her own coming-of-age story.

But malls have evolved – and their new incarnations offer more than the usual retail experience.

Shifting Popularity

Today, many conventional malls face declining popularity. There are probably multiple reasons for this. Shopping online is easier, and often cheaper. Specialized “big box” stores have soared in popularity as well, and usually offer better value. As a result, the appeal of malls has suffered.

And the economic downturn has hardly improved matters. Many of the large “anchor stores” that draw customers and revenue to malls are reporting major financial hits. In January, for example, Macy’s announced it was closing 11 stores nationwide, though none in Texas.

Other mall standards have fallen by the wayside. KB Toys folded in February 2009. The B. Dalton bookstore chain was acquired and ultimately liquidated by big-box retailer Borders. Musicland, Suncoast, Sam Goody – the list of extinct mall-based retailers is long and growing.

Shopping malls usually are reserved for impulse buys and extravagant spending, and for many shoppers such spending, often on credit, simply isn’t an option at present.



The present economy presents an especially tricky tightrope act for retailers hoping to attract customers back to malls. For one, malls generally provide non-essential products. You’d be hard-pressed to find, say, paper towels at one.

Shopping malls usually are reserved for impulse buys and extravagant spending, and for many shoppers such spending, often on credit, simply isn’t an option at present.

Better in Texas?

According to the International Council of Shopping Centers (ICSC), the trade association serving the retail real estate industry, the number of new shopping center construction jobs in Texas fell to 283 in 2008, down from 374 in 2007 (the most recent data available). The shopping centers’ share of total employment, however, remained relatively steady over the same period, falling to 11.4 percent, for a loss of just under 2 percent. Naturally, however, these numbers do not reflect the current downturn.

But Texas is in a unique spot, since our economy has fared relatively better overall, and many Texans may feel less of an economic pinch. Texas’ regional consumer confidence index (for an area also including Arkansas, Louisiana and Oklahoma) rose from 72.3 in January 2010 to 78.3 for this February, and is now up 54 percent from a year ago.

There are even some humble signs of recovery among anchor stores, especially those giants based in Texas.

Plano-based J. C. Penney Company, Inc. reported in March that its stores’ sales rose by 1.2 percent in the month ending Feb. 27, the first increase since November 2007.

In February, Dallas-based Neiman Marcus reported a 6.2 percent increase in same-store sales (excluding stores that opened or closed during the period) over the same month in 2009. It was the third straight month of such gains. Neiman Marcus attributed the boost to increased sales of luxury items, which may signal good news for malls – and the economy – if consumers can dig deeper for purchases.

Lifestyles for the Future

By now, hardcore shoppers may be biting their nails and wondering if mall shopping is going the way of parachute pants. The answer is no – kind of.

What’s happening is that developers are changing the way retailers appeal to shoppers. In many ways, the mall itself isn’t going away but evolving, and even expanding.

Your children, and your children’s children, may one day reminisce of what it was like to shop at “lifestyle centers” (see “Cities Within Cities,” September 2009 Fiscal Notes).

The goal of the lifestyle center is create a one-stop shop for living, work, play and shopping. For younger generations, especially urbanites in their 20s and 30s, the idea is especially appealing.

Lifestyle centers have popped up in cities including Dallas, Austin and Houston, offering a mishmash of high-end shopping, apartments, business offices, and – in the case of Austin’s Triangle lifestyle center – gourmet grilled-cheese restaurants.

That’s a long way from caramel corn and feathered hair. FN

To read more in-depth data on the state of U.S. and Texas shopping centers and retail trends, visit the International Center for Shopping Centers online.

Want to see a snapshot of key economic indicators, including retail? Visit the Comptroller’s Tracking the Texas Economy Web site.