A record number of stores have closed this year, leaving mall vacancy rates at an eight-year high as the biggest holiday shopping days of the year loom.
About 9,000 U.S. stores have closed this year, a nearly 54 percent increase from the 5,844 stores that closed last year, according to Coresight Research, which studies the retail industry.
The closures pushed regional mall vacancy rates across the nation to 9.3 percent in the second quarter of this year, their highest since the the third quarter of 2011, according to a study from real estate solutions company Reis. Meanwhile neighborhood and community store vacancy rates dropped slightly to 10.2 percent.
In the Dayton area, 10.3 percent of retail space is vacant, a jump of nearly an entire point from the end of 2018, according to a Colliers International study. Community shopping centers took the bulk of the loss, where regional centers like the malls and neighborhood centers that focus on convenience filled more square footage than last year.
“The biggest underlying issue here is we have too much retail space. We’re overretailed…as far as square footage in the country. So I think you’re seeing a correction there,” said Alex Boehnke, spokesman for the Ohio Council of Retail Merchants.
Online sales have also contributed to dropping foot traffic, but 90 percent of sales are still done in stores and people still want to make an experience out of holiday shopping, Boehnke said.
“When you’re shopping at a center that’s 100 percent occupied, you feel a lot better about your shopping experience,” said Scott Saddlemire, principal with Onsite Retail Group which connects retailers and restaurants with real estate. “It’s a psychological effect … And when you have dark spaces, you tend to just attract fewer shoppers. People want to go where they can get the biggest bang for their buck.”
Dozens of store have closed over the last year and a half, including all Elder-Beerman and Sears stores, Payless ShoeSource locations, the Burlington in Trotwood, Old Navy and Maurices at the Dayton Mall, Gymboree and Gap at The Greene Towne Center, Toys R Us last June and other mall stores including Crazy 8, Jeggings Park, Locker Room by Lids, Treasure Trove, Jos, Charlotte Russe and Trendzy.
Other local businesses including Moussaian Rugs, Dusty Miller Mercantile and Jimmy Modern have also closed.
Those vacancies can both positively and negatively affect other retailers looking to capitalize on the biggest shopping holidays of the year.
The sales that would have gone to closed retailers will be transferred to survivng stores and retailers in the path of anchors that remain open will see more concentrated foot traffic, Saddlemire said.
But in-line mall stores near dark anchor stores like the still vacant Elder-Beerman locations at the Mall at Fairfield Commons and Dayton Mall, along with Dayton Mall’s Sears, could suffer.
“Every mall that (Payless ShoeSource) would go into, they would always try to get in the Sears wing. As the years went on and sales at Sears kept falling and falling, Payless could look at their sales in all their mall stores and you could see the direct correlation,” Saddlemire said. “It had a huge impact on their sales.”
But area retailers have found some success in filling the vacant retail spaces. The Mall at Fairfield Commons in Beavercreek recently added more than a dozen new tenants and will open new-to-Dayton Round1 Entertainment Nov. 24 in the lower level of the former Sears, just ahead of the holiday shopping season.
Area mall owners remain optimistic.
“The Mall at Fairfield Commons has maintained a stable occupancy given a challenging retail environment impacting the country,” mall leadership said in a statement. “We have a great tenant lineup with a dynamic mix of retailers, restaurants, entertainment, services and local businesses. We continue to explore ways to further diversify tenancy over time including the Elder-Beerman space.”
The Room Place will open in the upper floor of the former Sears within a few months and a second store is in the works in the Dayton Mall space that used to be Old Navy.
Furniture stores have been moving into the Miami Valley in droves to take over the large, empty retail boxes. A new Bob’s Discount Furniture will open in the former Toys “R” Us in February and a Furniture Fair will fill the Beavercreek Toys “R” us later this month.
A Big Sandy store also recently opened in the former Miami Twp. Elder-Beerman furniture store.
Holiday shopping is crucial for a stable economy since about 30 percent of annual retail sales occur between Black Friday and Christmas, according to the National Retail Federation. U.S. consumers will spend about $730 billion during the holiday season and an average $1,048.
“Consumers still feel positive about their economic situation and that traditionally, when that’s the case, bodes well for our industry,” Boehnke said.
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