Teens are abandoning the mall – here’s how mall owners are responding

Live sports is to television what restaurants and cafes might be to the shopping mall, it seems.

Bear with me.

Retail ain’t what it used to be, and shoppers are changing their behaviour in big, broad ways that are having a profound impact on the old guard. Take a trip to a shopping mall to see, or spare yourself the time and visit here.

A new report published this week shows that mall traffic among teenagers—the bellweather demographic for the health of any mall from Winnipeg to Dallas—is down 30 per cent over the past decade.

Compared to the spring of 2007, it’s down nearly a quarter, according to Piper Jaffray’s semi-annual report on teen shopping trends.

American teens, or those aged 16.4 years old to be precise, are expected to average 29 trips to the mall this spring, according to the investment research company, down from 38 visits during the equivalent time in 2007.

The mall’s most dedicated constituents—kids who had nowhere else to go—are abandoning them. And the trend is happening here in Canada, too, says Robert Carter, an executive director of market research firm NPD Group, which tracks retail and consumer habits.

“Traffic to the malls, particularly in that age, is softening overall,” Carter said.

(U.S. averages, Source: Piper Jaffray)

Here’s where the similarity exists between live sports and cable, and restaurants and malls.

For the first time in the 13-year history of Piper Jaffray’s twice-a-year check-in with teens, the age group is spending more on food and dining out than anything else, even clothing.

“Restaurants have become a gathering place and teens are increasingly suggesting they prefer dining out to other forms of status brand spending,” the investment report says.

“We see restaurants as the next generation hang out for teens.”

Cable companies are increasingly banking on offering as much can’t-miss live entertainment, and sports in particular, as they can to keep customers from nixing their subscriptions.

Similarly, mall owners are looking to expand and enhance their food and restaurant experiences to keep customers from straying.

Both groups are being disrupted by the Internet.

Here in Canada, Oxford Properties recently completed a $35 million overhaul of the food court at its Yorkdale Shopping Centre in Toronto. Cadillac Fairview, another big mall owner, poured $45 million into upgrading and enlarging the number of food destinations at its Eaton Centre, another iconic Toronto shopping hub.

Young diners, big bills

The goal of course is to arrest and reverse traffic trends, especially among younger shoppers. Why the focus on younger cohorts? On top of the fact that they’re now spending more on food than ever younger shoppers actually spend the most, according to NPD Group.

Millennials—which NPD qualifies as those aged 18-34—are the biggest spenders when it comes to dining out, even outdoing their baby boomer parents who have deeper pockets.

“It’s this cohort that actually has the highest average eater cheque when they go out to restaurants,” Carter said.

Not surprisingly, teens are doing a good amount of shopping that would have occurred at a mall even just five years ago on their phones, laptops or tablets now, Carter says. Or the same places they’re getting a good amount of their video entertainment.

Steph Wissink, Piper Jaffray’s co-director of investment research summed it up as such:

“The universal truths about teens remain the same—they continue to seek peer affirmation, their spending is almost entirely discretionary, and they are early adopters of change.”