Foot traffic at Charlotte malls plummeted during the pandemic.
At Northlake and SouthPark, monthly foot traffic has averaged around 62% and 67%, respectively, of the baseline levels the malls had early last year, according to cell phone data analyzed by geospatial analytics company Orbital Insight.
- The holidays provided a bit of a boost to each mall. From November 1-December 31, foot traffic was at 83% and 88% at Northlake and SouthPark, respectively, of their baseline levels.
- In-person shopping still hasn’t fully bounced back, though it’s worse at Northlake. In 2021 so far, foot traffic at Northlake is at 64% of its baseline level; at SouthPark, it is at 80%.
Why it matters: The pandemic accelerated all kinds of trends that were already happening — including the decline of in-person shopping at malls.
- Foot traffic is the lifeblood of brick-and-mortar retail. Without the revenue it generates, stores can’t make rent, and they sometimes end up closing.
- A growing number of retailers have declared bankruptcy during the pandemic, including Charlotte-based Belk. [Go deeper]
- More than 50% of department stores anchoring malls will close by the end of 2021, CNBC reported last year, citing the real estate firm Green Street Advisors.
Of note: To determine the baseline of “normal” activity, Orbital used the average foot traffic from February 1 through February 29, 2020. This was before the state put restrictions in place.
- North Carolina required all “non-essential” retailers, including malls to close in March 2020.
- They were allowed to reopen in May 2020, albeit with capacity limits. [Go deeper]
Coronavirus could permanently change what malls look like, UNC Charlotte Economist John Connaughton said during a quarterly economic forecast last week.
“We’ve seen mall occupancy decline considerably during the pandemic,” Connaughton said. “When you start going back to your mall, you’re going to notice that a lot of stores aren’t there anymore.”
Northlake already has lost a handful of notable tenants during the pandemic, including a two-story Dick’s Sporting Goods, as CBJ reported.
Losing an anchor like Dick’s is a big deal. Smaller mall tenants often have clauses in their contracts that give them negotiating power if large anchors stores go dark, experts say. This means that they can demand rent relief or break their leases and close for good if an anchor stays closed.
Why SouthPark and Northlake: The two malls represent different sides of the shopping-center spectrum. (Representatives from neither SouthPark nor Northlake responded to a request for comment.
- SouthPark is a high-end mall and is considered one of the most successful shopping centers in the South. Over the years, SouthPark has added popular upscale retailers like Nordstrom, Lululemon, Gucci and Apple.
- At Northlake, investment has lagged. Five years ago, the mall’s owners announced plans for a $50 million addition that would include all kinds of new retail, entertainment and restaurants. Those plans have never panned out, I wrote in 2018.