Table of Contents
- Key Highlights
- Introduction
- The Historical Context of American Shopping Malls
- The Current State of Retail: Key Findings
- Factors Driving the Decline
- Real-World Examples: What This Means for Major Retailers
- The Future of Retail: What Lies Ahead?
- Conclusion: A New Era for Shopping
- FAQ
Key Highlights
- A recent study by Selfie Leslie reveals a 62% decline in in-store shopping across the U.S. over the past decade, with a simultaneous 111% rise in online shopping.
- Major cities like New York, Chicago, and San Francisco are experiencing significant drops in mall traffic, leading to mass layoffs in the retail sector.
- Industry experts note that changing consumer habits, supply chain issues, and increasing competition are driving the decline of brick-and-mortar stores, with projections of 15,000 retail closures in 2025.
Introduction
The American shopping mall, once a bustling epicenter of community and commerce, now faces an unprecedented decline that is reshaping the retail landscape. A recent report highlights a staggering 62% drop in in-store shopping over the past decade, paralleled by a remarkable 111% increase in online shopping. This shift not only transforms the shopping experience but also poses significant implications for employment, small businesses, and urban development. As we explore the factors contributing to this trend, we will examine its historical context, the state of major cities, and what the future might hold for America's retail sector.
The Historical Context of American Shopping Malls
Shopping malls became a staple of American life in the 1960s and 1970s, emerging as cultural icons that offered consumers a one-stop destination for shopping, dining, and entertainment. The concept of the enclosed shopping mall, popularized by developers like Victor Gruen, revolutionized retail by creating a controlled environment where consumers could shop year-round without the interference of weather.
At their peak, malls represented more than just commercial spaces; they were social hubs where families gathered and communities connected. However, the dawn of the internet in the late 1990s began to alter this dynamic, as online shopping offered convenience that traditional retail could not match.
The Current State of Retail: Key Findings
A study conducted by fashion brand Selfie Leslie outlines a stark reality for the retail industry. The findings indicate that in-store shopping has seen a dramatic decline across the U.S., particularly in major metropolitan areas.
Major Cities Hit Hardest
- New York: A significant 77% decline in foot traffic, accompanied by a 102% surge in online orders.
- Chicago and San Francisco: Both cities report a 70% drop in in-store shopping, with corresponding increases in online sales of 126% and 67%, respectively.
This data paints a grim picture for physical retail spaces, which now struggle to attract customers who prefer the convenience of online shopping platforms.
The Impact on Employment
The repercussions of this retail decline are felt in the workforce. According to Challenger, Gray & Christmas (CGC), there was a notable surge in retail layoffs, with 11,483 job cuts announced in May 2025 alone, a sharp rise from 7,235 in April. Over the first five months of the year, planned layoffs soared to 75,802, marking a 274% increase compared to the same period in the previous year.
This trend raises concerns about the future of jobs in the retail sector, particularly for part-time employees and those in lower-income brackets who depend on these positions for their livelihoods.
Factors Driving the Decline
Several interconnected factors contribute to the decline of American shopping malls and retail stores:
Shift in Consumer Behavior
The evolution of consumer habits has been the most significant driver of the decline. The COVID-19 pandemic accelerated the transition to online shopping, with many consumers finding convenience in purchasing goods from home. As retail expert Nicole Leinbach Hoffman points out, "supply chain disruptions, increased competition, and changing consumer habitsāincluding online buyingāare all strong influencers to the challenges facing retailers."
Economic Pressures
Rising inflation rates and economic uncertainty have forced consumers to be more selective about their spending. Many are prioritizing essential goods while cutting back on discretionary purchases. This shift places additional strain on traditional retailers, especially those operating in the mall format.
Competition from E-Commerce Giants
Companies like Amazon have fundamentally changed the retail landscape, offering vast selections, competitive pricing, and rapid delivery options that traditional malls cannot match. As online shopping becomes increasingly integrated into everyday life, brick-and-mortar stores struggle to keep pace.
Real-World Examples: What This Means for Major Retailers
The challenges facing malls and physical retailers have prompted some well-known brands to close locations or scale back operations.
Case Study: Bed Bath & Beyond
Bed Bath & Beyond, once a staple of mall retail, announced plans to close over 100 stores due to declining sales and increased competition from e-commerce. The company's struggles highlight the vulnerabilities of retailers that rely heavily on foot traffic.
Case Study: Mall of America
Even iconic destinations like the Mall of America are not immune to these trends. While it remains the largest mall in the U.S., reports indicate a shift in consumer behavior, with more visitors opting for entertainment and dining experiences over traditional shopping.
The Future of Retail: What Lies Ahead?
As the retail landscape continues to evolve, the future of shopping malls remains uncertain. Experts predict that while some retailers will adapt and thrive, others may face inevitable closure.
Predictions for Retail Closures
Coresight Research has estimated that approximately 15,000 stores will close in 2025, more than double the 7,325 that closed in 2024. This trend underscores the urgency for retailers to innovate and redefine their business models to survive in an increasingly digital environment.
The Role of Technology
Retailers are beginning to invest in technology to enhance the shopping experience, blending online and in-store capabilities to attract customers. Examples include augmented reality (AR) for virtual try-ons and personalized marketing strategies driven by data analytics.
Conclusion: A New Era for Shopping
The decline of American shopping malls marks the end of an era characterized by physical retail dominance. However, it also signals the beginning of a new phase in retail, where businesses must adapt to changing consumer preferences and technological advancements.
As we move forward, the challenge for retailers will be to find innovative ways to engage consumers, whether through enhanced in-store experiences or by maximizing their online presence. The future of retail is not merely about survival but about transformation, requiring a reevaluation of how products are marketed, sold, and delivered.
FAQ
What is causing the decline of shopping malls in the U.S.?
The decline of shopping malls is primarily driven by changing consumer behavior favoring online shopping, economic pressures, and increased competition from e-commerce giants.
How has the COVID-19 pandemic affected retail?
The pandemic accelerated the shift towards online shopping, leading many consumers to prefer the convenience of purchasing goods from home rather than visiting physical stores.
Are all retailers struggling?
Not all retailers are struggling; some are successfully adapting their business models to integrate online and offline sales, while others face closures due to declining foot traffic and sales.
What can retailers do to survive?
Retailers can survive by embracing technology, offering personalized shopping experiences, and adapting their business strategies to meet changing consumer demands.
How many stores are expected to close in the coming years?
Experts predict that around 15,000 stores could close in 2025, significantly higher than previous years, reflecting the ongoing challenges in the retail sector.
