Traffic, sales are healthy at U.S. malls: Simon and General Growth CEOs
Publish Date: February 03, 2016
Traffic was flat at Simon’s malls in 2015, but same-store sales climbed 5.7 percent, the firm reports. That’s because consumers are more informed and focused than ever when they arrive at malls these days, and therefore browse less and spend more, says David Simon, chairman and CEO of the firm, which has 108 malls totaling 122 million square feet in its portfolio. The firm also owns 71 outlet centers totaling 30 million square feet.
“I know you've all heard about mall traffic decreases,” Simon said on an earnings call with analysts, referring to reports from third-party traffic counting firms. “But let me give you some facts based on our internal data across the largest retail portfolio in the U.S. and not just estimates derived from arbitrary algorithms. Traffic at our malls was flat for the year including the holiday season, traffic at our Premium Outlets increased 1.5 percent for the year and more than 2 percent for the holidays, and traffic at the Mills increased slightly for the year as well.”
Simon says mobile technology allows consumers to pre-shop and browse fewer stores during shopping trips than in the past. Any decline in store traffic is driven by the retailers themselves, and not related to overall mall traffic, he added.
Meanwhile, at General Growth Properties malls traffic grew by 2 percent in 2015, while same-store sales per square foot increased by 3 percent at the company’s small-shop tenants, according to CEO Sandeep Mathrani. “Mall traffic is actually up and one of the biggest pain points during the holiday season was lack of parking,” he said. “So we're obviously seeing people come to the mall. We're seeing then stay longer at the mall. They're shopping a lot of fewer stores when they come into the mall, but they’re definitely roaming the malls and shopping.”