Store closings slowed down in September and October
As COVID-19 cases scaled up during the month of May, 1,385 stores taking up 40 million sq. ft. closed for good in the United States. In July and August, another 3,500 stores occupy 36 million sq. ft. of space shut down. But store closings declined greatly in September and October when a total of 860 stores left just 6 million sq. ft. empty.
That’s the tally of CoreSight, a leading real estate industry research company that first reported seeing store closings accelerate four years ago.
“The key reason is the rise of e-commerce--that and the fact that the market was over-built,” said Kevin Cody, senior consultant for CoStar Advisory Services. “This year, a lot of the space that closed was occupied by longtime, permanent mall tenants. They were already struggling heavily, and the pandemic did not help.”
Shutdowns by J.C. Penney, Macy’s, Lord & Taylor, and Pier 1 bulked up the square footage totals of store closings, along with experience-based tenants like gyms and movie theaters. 24 Hour Fitness is in a restructuring program and Regal Cinemas recently shut down all of its theaters for a second time when Hollywood studios began delaying major releases.
CoreSight predicted that mall vacancies will continue at a pace more than double that of any other retail center sector. Power centers will decline, as well, but to a much lesser degree.
Cody noted that essential retailers such as Dollar General, Dollar Tree, Lidl, and Aldi have stepped up their expansions during the pandemic, but not enough to keep the marketplace at stable levels.
“The number of openings have not come close to the number of store closures,” he said.