There’s no end in sight to American’s shopping mall crisis, according to a Morningstar research report.
Hundreds of shopping malls have shut down over the last several years amid a pullback in consumer spending on apparel and accessories and the growth of ecommerce.
But the US is still oversaturated with shopping malls, and that’s putting $48 billion in loans backed by mall properties at risk, according to the Morningstar analysts.
“The abundance of space, the growth of e-commerce, and other factors are forcing retailers to reconsider their physical store strategy,” the analysts wrote.
The US has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia — the next two countries with the highest retail space per capita.
Department stores like Sears, Macy’s, and JCPenney have been closing stores to try and get rid of unprofitable stores, and that’s had a devastating effect on malls.