According to analysis from New York based real estate research firm Reis Inc, vacancies at US neighborhood shopping centers moved closer to the highest on record during the second quarter of this year. This contributes to evidence that the economic recovery has not taken hold amongst the people despite what you might read in the press. Consumers are tapped out with the highest debt levels in history and plummeting credit scores. Malls are becoming ghost towns. Consumer sentiment is eroding and frugal attitudes are most likely here to stay for a long time. Forget about consumer sentiment, no one’s got any money to spend and now there are fewer places to spend it.
Because of the wealth concentrated where I live in Los Angeles we are not seeing the devastation to shopping centers that some other areas are, but I noticed recently on a trip to a local mall that the wide selection of goods we grew accustomed to during the boom years has greatly deteriorated. On this particular occasion I was looking at costume jewelry specifically, trying to find a simple long silver-tone chain necklace. I thought I’d have twenty to choose from at Macy’s alone. No such luck! They had two, and neither was long enough. (My goodness, what’s a girl to do?) I wandered from store to store and finally came across something I could use after three hours of searching. The good news for me is it had been marked down to half price- cause no one’s buying out there! At the same time I’ve noticed the selection of specialty housewares and luxury items explode over the last couple of years at second run retailers like Marshall’s and Ross. Heated slippers and olive tongs are just not viable in today’s recessionary market, I suppose.
Expect to see more economic damage to shopping centers. People are moving toward frugality (it’s the new black!). This is as much out of necessity as it is out of a growing distaste for frivolous consumption and addictive spending. Heck, we may even have a real depression in the works here after all. In any case, it seems the party of a lifetime is long over and we find ourselves coming to in some sort of an abandoned shopping center with a splitting headache and an empty wallet.
U.S. Shopping Center Vacancies Approach Record High, Reis Says
July 7, 2010