The rise and fall of the American shopping mall (2024)

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The nation's first fully enclosed indoor mall opened on October 8, 1956. Called Southdale Center, the shopping center was located in the suburbs of Minneapolis, Minnesota, and contained shops, fountains, art installations, a courtyard, and a bird sanctuary. The mall was designed by Victor Gruen, an architect known up until that point for designing boutiques and storefronts. Gruen's mall was met with rave reviews, with some going as far as to compare it to Disneyland — incidentally, Walt Disney later cited Gruen's work as one of the inspirations for his Epcot theme park. The middle of the century was uniquely primed for the advent of the shopping mall. The birth of the interstate highway system meant the suburbs were growing at warp speed, and people had more money to spend post-World War II. Not only that, but changing tax laws made it lucrative to invest in commercial real estate, leading to shopping centers springing up across the country. For example, six new shopping plazas were built in or near downtown Cortland, New York, between 1950 and 1970 even though the population had hardly budged. By 1960, there were 4,500 large shopping complexes in the US, meaning an average of at least three new shopping centers had opened every day since 1956. The 1970s brought about another new invention: the food court. The first food court opened in New Jersey's Paramus Park Mall in 1974, with the hope that it would be a place for teenagers to safely socialize — and a way for mall owners to make more money. By the mid-1970s, 33% of all US retail sales happened at a mall or shopping center — a decade later, that number had grown to 52%. By 1986, there were 25,000 shopping malls nationwide, and they'd become de facto town squares. The mall was where teens hung out and where single people met for dates. Music and movies glamorized and skewered the mall in equal measure, while Consumer Reports named it one of the top 50 inventions that had revolutionized consumer life – alongside innovations like antibiotics and birth control pills. Mall culture reached a fever pitch in 1992 upon the opening of the Mall of America outside Minneapolis. The 5.6 million-square-foot megamall housed over 500 stores, a theme park complete with roller coasters, a full-size aquarium, a wedding chapel, and a movie theater. These days, the mall has its own comedy club and escape room. For a while, megamalls were wildly popular — and profitable. A decade after Mall of America opened, it was drawing 43 million visitors every year and reporting about $900 million in annual sales. But American shopping habits had begun to change. Department stores had lost their cachet, replaced by one-stop shops like Walmart. Consumers started buying things from catalogs and TV shopping channels rather than strolling through the mall for pleasure. Plus, malls that had been around for 20 or 30 years were starting to look dated and rundown ... ... and the department stores, known as "anchor tenants," were frequently poached by the newer, more popular megamalls nearby, leaving older malls to slowly wither and die. Then the 2008 Recession hit, sending tenants' sales plummeting and mall vacancy rates soaring. By the end of 2009, there were dozens of so-called "dead malls" across the country. The 2010s marked a painful decade in shopping-mall history. Between 2010 and 2013, visits to malls during the holiday shopping season had dropped by 50%. By 2014, a fifth of the malls had "troubling" vacancy rates, while 3% had such high vacancy rates, they were considered to be dying. In 2017, 7,000 retailers — many of them department stores — closed their doors. Anchor tenants like Sears and JCPenney left behind massive, empty shells at malls across the country that mall owners struggled to fill. Why did malls fall so hard, so fast? For one, there were simply too many of them, to the point that malls in close proximity would cannibalize each others' sales. For another, they were less necessary than they once were, thanks to the rise of online shopping. Plus, the middle class wasn't as resilient as it once was. Middle-income shoppers had shifted their spending toward cheaper retailers like Target, Walmart, and Dollar General, leaving department stores behind. Innovative developers are turning those empty malls into everything from medical centers to Amazon fulfillment centers. In some malls, abandoned stores are being turned into aquariums, haunted houses, and escape rooms. But the shopping mall isn't dead yet. In 2019, American Dream, a 3 million-square-foot megamall, opened its doors in East Rutherford, New Jersey. It's the nation's second-largest mall after Mall of America. American Dream contains its own amusem*nt park, water park, indoor ski hill, and ice-skating rink — not to mention room for hundreds of stores. But American Dream was a victim of bad timing: less than six months after its grand opening, the pandemic hit, and the mall was forced to close its doors. While the mall was hailed as the second coming of the Mall of America, that popularity never materialized, and American Dream has struggled financially since it opened, losing $60 million in 2021 alone and missing an $8.8 million debt payment in 2022. Still, American Dream — and the 1,100 other malls nationwide — are hanging on, and in some cases, showing signs of growth. Ahead of the 2022 holiday season, foot-traffic data indicated that shoppers were returning to malls for their holiday shopping and that the bulk of sales would happen in person. The country's largest mall owner, Simon Property Group, said in August 2022 that a mix of factors, including people moving during the pandemic and e-commerce brands looking to open brick-and-mortar spaces, were helping mall occupancy rates to rise nearly 2% compared to 2021. FAQs

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Avery Hartmans

2023-01-06T10:00:00Z

The rise and fall of the American shopping mall (1)

When the first malls opened in the 1950s they were such an achievement that they inspired even Walt Disney.
By the 1980s, the mall had become the center of American social life and accounted for the bulk of all retail sales.
But a shrinking middle class, the rise of online shopping, and the fact that there were simply too many malls contributed to the decline of the American mall.

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The nation's first fully enclosed indoor mall opened on October 8, 1956. Called Southdale Center, the shopping center was located in the suburbs of Minneapolis, Minnesota, and contained shops, fountains, art installations, a courtyard, and a bird sanctuary.

The rise and fall of the American shopping mall (2)

Source: Insider

The mall was designed by Victor Gruen, an architect known up until that point for designing boutiques and storefronts. Gruen's mall was met with rave reviews, with some going as far as to compare it to Disneyland — incidentally, Walt Disney later cited Gruen's work as one of the inspirations for his Epcot theme park.

The rise and fall of the American shopping mall (3)

Source: Insider

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The middle of the century was uniquely primed for the advent of the shopping mall. The birth of the interstate highway system meant the suburbs were growing at warp speed, and people had more money to spend post-World War II.

The rise and fall of the American shopping mall (4)

Source: Smithsonian Magazine

Not only that, but changing tax laws made it lucrative to invest in commercial real estate, leading to shopping centers springing up across the country. For example, six new shopping plazas were built in or near downtown Cortland, New York, between 1950 and 1970 even though the population had hardly budged.

The rise and fall of the American shopping mall (5)

Source: Smithsonian Magazine

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By 1960, there were 4,500 large shopping complexes in the US, meaning an average of at least three new shopping centers had opened every day since 1956.

The rise and fall of the American shopping mall (6)

Source: Insider

The 1970s brought about another new invention: the food court. The first food court opened in New Jersey's Paramus Park Mall in 1974, with the hope that it would be a place for teenagers to safely socialize — and a way for mall owners to make more money.

The rise and fall of the American shopping mall (7)

Source: Federal Reserve Bank of Richmond

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By the mid-1970s, 33% of all US retail sales happened at a mall or shopping center — a decade later, that number had grown to 52%.

The rise and fall of the American shopping mall (8)

Source: Insider, The New York Times

By 1986, there were 25,000 shopping malls nationwide, and they'd become de facto town squares. The mall was where teens hung out and where single people met for dates. Music and movies glamorized and skewered the mall in equal measure, while Consumer Reports named it one of the top 50 inventions that had revolutionized consumer life – alongside innovations like antibiotics and birth control pills.

The rise and fall of the American shopping mall (9)

Source: The New York Times, Vice

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Mall culture reached a fever pitch in 1992 upon the opening of the Mall of America outside Minneapolis. The 5.6 million-square-foot megamall housed over 500 stores, a theme park complete with roller coasters, a full-size aquarium, a wedding chapel, and a movie theater. These days, the mall has its own comedy club and escape room.

The rise and fall of the American shopping mall (10)

Source: Insider, Federal Reserve Bank of Richmond

For a while, megamalls were wildly popular — and profitable. A decade after Mall of America opened, it was drawing 43 million visitors every year and reporting about $900 million in annual sales.

The rise and fall of the American shopping mall (11)

Source: Los Angeles Times

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But American shopping habits had begun to change. Department stores had lost their cachet, replaced by one-stop shops like Walmart. Consumers started buying things from catalogs and TV shopping channels rather than strolling through the mall for pleasure.

The rise and fall of the American shopping mall (12)

Source: The New York Times

Plus, malls that had been around for 20 or 30 years were starting to look dated and rundown ...

The rise and fall of the American shopping mall (13)

Source: Smithsonian Magazine

Advertisem*nt

... and the department stores, known as "anchor tenants," were frequently poached by the newer, more popular megamalls nearby, leaving older malls to slowly wither and die.

The rise and fall of the American shopping mall (14)

Source: Insider

Then the 2008 Recession hit, sending tenants' sales plummeting and mall vacancy rates soaring. By the end of 2009, there were dozens of so-called "dead malls" across the country.

The rise and fall of the American shopping mall (15)

Source: The Wall Street Journal

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The 2010s marked a painful decade in shopping-mall history. Between 2010 and 2013, visits to malls during the holiday shopping season had dropped by 50%. By 2014, a fifth of the malls had "troubling" vacancy rates, while 3% had such high vacancy rates, they were considered to be dying.

The rise and fall of the American shopping mall (16)

Source: Time, The New York Times

In 2017, 7,000 retailers — many of them department stores — closed their doors. Anchor tenants like Sears and JCPenney left behind massive, empty shells at malls across the country that mall owners struggled to fill.

The rise and fall of the American shopping mall (17)

Source: Federal Reserve Bank of Richmond, Insider

Advertisem*nt

Why did malls fall so hard, so fast? For one, there were simply too many of them, to the point that malls in close proximity would cannibalize each others' sales. For another, they were less necessary than they once were, thanks to the rise of online shopping.

The rise and fall of the American shopping mall (18)

Source: Federal Reserve Bank of Richmond, Insider

Plus, the middle class wasn't as resilient as it once was. Middle-income shoppers had shifted their spending toward cheaper retailers like Target, Walmart, and Dollar General, leaving department stores behind.

The rise and fall of the American shopping mall (19)

Source: Racked, Federal Reserve Bank of Richmond, Insider

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Innovative developers are turning those empty malls into everything from medical centers to Amazon fulfillment centers. In some malls, abandoned stores are being turned into aquariums, haunted houses, and escape rooms.

The rise and fall of the American shopping mall (20)

Source: Fast Company, NBC News

But the shopping mall isn't dead yet. In 2019, American Dream, a 3 million-square-foot megamall, opened its doors in East Rutherford, New Jersey. It's the nation's second-largest mall after Mall of America.

The rise and fall of the American shopping mall (21)

Source: Insider

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American Dream contains its own amusem*nt park, water park, indoor ski hill, and ice-skating rink — not to mention room for hundreds of stores.

The rise and fall of the American shopping mall (22)

Source: Insider

But American Dream was a victim of bad timing: less than six months after its grand opening, the pandemic hit, and the mall was forced to close its doors. While the mall was hailed as the second coming of the Mall of America, that popularity never materialized, and American Dream has struggled financially since it opened, losing $60 million in 2021 alone and missing an $8.8 million debt payment in 2022.

The rise and fall of the American shopping mall (23)

Source: Retail Dive

Advertisem*nt

Still, American Dream — and the 1,100 other malls nationwide — are hanging on, and in some cases, showing signs of growth. Ahead of the 2022 holiday season, foot-traffic data indicated that shoppers were returning to malls for their holiday shopping and that the bulk of sales would happen in person.

The rise and fall of the American shopping mall (24)

Source: Insider Intelligence

The country's largest mall owner, Simon Property Group, said in August 2022 that a mix of factors, including people moving during the pandemic and e-commerce brands looking to open brick-and-mortar spaces, were helping mall occupancy rates to rise nearly 2% compared to 2021.

The rise and fall of the American shopping mall (25)

Source: CNBC

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FAQs

What caused the decline of shopping malls? ›

By the 1980s, the mall had become the center of American social life and accounted for the bulk of all retail sales. But a shrinking middle class, the rise of online shopping, and the fact that there were simply too many malls contributed to the decline of the American mall.

Tell Me More ›

Why did people stop going to the mall? ›

There's a decrease in foot traffic

This decline in malls' ability to retain their customers, could be for a number of reasons, including the fact that there are now more options for shopping and entertainment, or simply because people don't see malls as being as social or fun as they used to be.

Learn More ›

What is the future of the American mall? ›

A comprehensive research study was done by Coresight earlier this year and revealed that the American mall is not dead. In fact, traffic is up 12 percent at top-tier malls, and occupancy is at 95 percent post-pandemic. But these complexes are becoming a smaller part of the retail footprint.

Show Me More ›

When was the peak of shopping malls? ›

The peak year for malls in this country was 1982. Through the 1990s, about 140 new ones came on line each year. But few if any conventional enclosed malls have been built in the United States since 2007.

See Details ›

When did malls stop being popular? ›

21st-century retailing trends favor open air lifestyle centers; which resemble elements of power centers, big box stores, and strip malls; and (most disruptively for storefronts) online shopping over indoor malls. The massive change led Newsweek to declare the indoor mall format obsolete in 2008.

Get More Info ›

Why are malls becoming obsolete? ›

E-commerce has permanently changed the way consumers shop, and shopping malls are not what they once were. But there is still hope for mall-based and brick-and-mortar retailers. By merging the benefits of online and in-store shopping, you can create a unique experience your customers won't forget.

Know More ›

Is the Mall of America still thriving? ›

Joining the Mall of America's long list of surprising facts is this one: The place continues to hold its own despite the dominance of online shopping, the wobbly fortunes of anchor stores and the ravages on retail from Covid-19.

Find Out More ›

Why is the American Dream mall losing money? ›

American Dream, which has faced construction delays, pandemic shutdowns, and a fire that closed its indoor ski slope for several months, has struggled to manage its debt. In November 2022, lenders led by JPMorgan Chase & Co. gave American Dream a four-year extension on repaying $1.7 billion in construction borrowing.

Keep Reading ›

What is replacing malls? ›

Some are being converted to recreational uses, data centers, or e-commerce fulfillment. But retail-to-residential conversions seem to be leading the way.

Learn More Now ›

What was the last mall in the United States? ›

Have you ever been to The Mall at University Town Center (UTC) in Sarasota, Florida? If not, you might be missing out on a piece of history, because, by most accounts, it just might have been the last new-build enclosed mall constructed in America.

Find Out More ›

When was the heyday of shopping malls? ›

The number of American shopping centers exploded from 4,500 in 1960 to 70,000 by 1986 to just under 108,000 by 2010. Thus, the number of dead malls increased significantly in the early 21st century. The economic health of malls across the United States has been in decline, as revealed by high vacancy rates.

Why were malls so popular in the 80s? ›

One major change in the 80's was the emergence of shopping malls. Large scale malls saw a surge in popularity that led to aggressive expansion as these places became a gathering spot for young people in their bid to assert their independence.