Littering The Landscape With Dead Malls

Date: 1 Nov 2000 | posted in: Retail | 0 Facebooktwitterredditmail

As corporate chains have taken over much of the retail economy, they’ve left the American landscape littered with dead malls, vacant strip developments, out-dated outlet centers, and empty big box superstores.

The problem is two-fold. Chain stores are multiplying at a staggering pace and creating a glut of retail space. In the last 12 years alone, per capita retail space has increased 34 percent, from 14.7 to 19.7 square feet. Most communities have more retail space than residents can support. Large sections inevitably end up vacant.

The second part of the problem is that corporate chains reinvent themselves every ten years or so, abandoning existing outlets in favor of new formats. First there were the strip malls, which gave way to the enclosed malls. These in turn failed as developers built successive waves of ever larger regional malls. Hundreds of malls weakened and died following the arrival of the first wave of big box stores in the 1980s. Then in the 1990s the big boxes began to shed their existing skins, building larger stores and congregating in groups known as “power centers.”

Wal-Mart is one of the worst offenders. In the last few years, the company has abandoned hundreds of stores, many less than ten years old. In some cases, the company decides profits at a new location are not good enough and leaves the area altogether. More often, Wal-Mart closes an existing store to open a larger store across the street or across town.

In West Columbia, South Carolina, for example, Wal-Mart recently vacated a 100,000 square foot store to open a new 220,000 square foot “supercenter” next door. Supercenters are the company’s latest format craze, combining general merchandise and a full supermarket under one giant roof. Near the empty Wal-Mart sit ten other abandoned or soon to be vacated big boxes, including Lowe’s, Target, and Circuit City. All are building larger outlets.

According to Al Norman of Sprawl-Busters, Wal-Mart alone has nearly 400 empty stores in the U.S. That adds up to more than 30 million square feet of vacant retail space surrounded by millions of acres of useless parking. The company plans to “relocate” as many as 110 additional stores in the next year.

Most of these stores will remain vacant for many years. The buildings are single-purpose and unsuitable for much besides big box retailing. Most chains, including Wal-Mart, prefer to maintain the lease rather than letting the property fall into the hands of a competitor.

City officials in Peachtree, Georgia are considering an ordinance that would require retailers who vacate more than 10,000 square feet to allow the landlord to immediately re-lease the property. Some developers question the legality of interfering with private contracts, but city officials say there are overriding public health and safety concerns.

All together, of the five billion square feet of retail space in the country, half a billion sits empty, according to the National Trust for Historic Preservation. That’s the equivalent of about 4,000 dead shopping malls.

This wasteful phenomenon concerns environmentalists and preservationists, but it has also caught the attention of real estate interests. In their “Emerging Trends in Real Estate 2000” report, PricewaterhouseCoopers and Lend Lease Real Estate Investments advise investors to “shun power centers.” Too many big boxes have been built, the report notes. America is over-retailed and e-commerce threatens to further erode demand. As for enclosed malls, a new one can survive only by “killing the existing mall [and] attracting its prime stores.”

For communities considering new chain store developments, this is advice worth heeding. Rather than becoming a victim of the corporate cannibalization game, many communities are opting to maintain traditional downtowns and neighborhood retail districts. This requires strong land use planning and a commitment to funnel new investment downtown and not to outlying areas.

But the pay-off is big. Many Main Streets have been around for hundreds of years and have the potential to endure for hundreds more. Individual businesses may come and go—yesterday’s dry goods store becomes today’s internet cafe—but the structure itself retains its utility and its place as the community’s social an economic center.

Avatar photo
Follow Stacy Mitchell:
Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.