In a post-pandemic world, will Canadians ever go back to shopping malls?

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In a post-pandemic world, will Canadians ever go back to shopping malls?
WATCH: In a post-pandemic world, will Canadians ever go back to shopping malls? – Jun 24, 2021

Rumours about the impending death of the shopping mall have been circling for years.

Between 2018 and 2019, even before the COVID-19 pandemic, foot traffic to Canada’s top 10 malls — as measured by revenue per square foot — declined by 22 per cent, according to research from Deloitte Canada. And when the consulting giant measured foot traffic in February 2020, still before the COVID-19 lockdowns, and February 2019 it found an even steeper drop of 42 per cent.

But as COVID-19 restrictions across the country loosen up amid soaring vaccination rates, some experts believe the pandemic may have given shopping malls — or at least some of them — a new lease on life.

Canadians have been collectively spending more than $2 billion more a month shopping online than they did in pre-pandemic times, according to a recent study by PayPal Canada. But evidence from the U.S., which is further along than Canada in reopening its economy, suggests there’s pent-up demand for in-person shopping after months of limited access to stores.

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South of the border, in-store shopping saw a 10 per cent bump as stores and malls began welcoming customers again, says Marty Weintraub, who leads the national retail consulting practice at Deloitte Canada.

“People have been cooped up for way too long,” Weintraub says. “Sure, they’ve migrated a large chunk of their purchases online, but there’s no doubt in my mind that we will see people return to malls probably pretty fiercely at the beginning to sort of catch up on some of the things they didn’t, couldn’t or weren’t able to get from a supply perspective in malls.” 

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Future of retail

Some outdoor malls are already seeing signs of the unleashing of that long-repressed craving for in-person shopping. Dozens of people reportedly lined up outside several stores in Ottawa’s Tanger Outlets mall on June 11, when Ontario non-essential retailers reopened for in-store shopping.

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And while the pandemic introduced more Canadians to the tantalizing convenience of grocery delivery, it also highlighted the fact that, for some types of purchases, checking out the product in person matters.

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“With high-touch items like clothing — even furniture or appliances — where you really need to see what you’re buying and experience it … all of those things become something that lend themselves better to in-person shopping,” says Jennifer Marley, partner at Sklar Wilton & Associates.

Over the longer term, though, many of the trends the pandemic helped accelerate likely mean malls will have to rethink the way they do business, says retail analyst and author Bruce Winder.

With what Winder calls “power malls,” the signature shopping centres in Canada’s big cities, the future lies in shifting the focus to providing shoppers with experiences, not just a place to do some shopping.

It’s a trend that was already afoot before the COVID-19 health emergency, with large, upscale malls increasingly upgrading from the standard food court to gourmet restaurants.

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Walmart to test stores with no cashiers and all self-checkouts

The in-store experience will also be an important draw, Winder says. Shoppers may make a trip to the mall to try out — or try on — products but may decide to place orders later on online, he says.

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Even so-called digitally native retailers, which started offering their products exclusively online, are now opening stores, Weintraub notes.

“One thing we’ve learned as an industry is that the magic comes when you have those stores and digital shopping (and) you bring them together,” he says.

For less fancy malls, the pandemic-era online shopping boom likely means the future is going to become a bit more “transactional,” Winder says.

Those are the kinds of malls where you go to get your groceries done or to see the dentist, he says. Increasingly, these malls may see more of the space taken up by storage facilities for online orders.

“You’ll go there to pick up some packages and maybe grab something to eat,” he says.

For some malls, though, there simply won’t be enough of a market, he warns. For those, one possibility is redevelopment to turn them into mixed-use structures with retail, office and residential spaces, he says.

Another option for struggling malls, particularly in smaller markets, may be to shift the focus from big-box stores to local retailers, Weintraub says.

“One of the things we learned through the pandemic … is that people want to support local,” he says. It’s an opportunity for “mall owners and retailers to figure out how to meet that need.”


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