UK's shopping centers are in growing troubles
Since WWII, the concept of the shopping mall, which has its roots from the US has been the heart and soul of communities. The five most large shopping malls around the world are found in Asia. The New South China Mall in Dongguan is the largest shopping mall which stands at 2.9 million meters of space. However, it seems that the trend of shopping malls has reached its inflection point in the 21st century.
Over the past couple of years, large retailers in the UK have been shutting down.
For instance, Mark and Spencer's are expected to shut down 100 stores by 2020. Other retailers such as Debenhams have cut hundreds of jobs while others such as Toys R Us, Poundworld and Maplin have collapsed entirely. A retailer such as Sears was the largest retailer in the US until 1989 when it was ruled out by Walmart. It is currently facing an apocalypse which is going to see its closure.
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What are the reasons that are causing shopping centers to shut down?
Over the past couple of years, there has been a digital Revolution that has introduced online shopping. Thus it should not be a surprise that online retailers have been one of the reasons that have caused shopping centers troubles. Millennials prefer shopping online rather than visiting brick-and-mortar retail stores. A recent study done by PayPal estimates and this phenomenon is increasing at 20%, and by the year 2020, it will be worth 10 billion euros.
In Ireland, there are 67% Amazon users that have shown great loyalty to the retail king. Online retailing is one of the reasons for the Demise of shopping centers such as BHS in the UK. In 2016 BHS collapsed and left around 200 vacant units that have never been filled up.
The lack of investment in shopping centers is another reason that can be attributed to the collapse of shopping centers in the UK. Therefore it is a common sight to see shopping centers being occupied and then vacated in a couple of months. For instance, The Callendar Square shopping center located at Falkirk, Stirlingshire was valued at more than £25 million. However in an auction in 2017 the shopping center sold for £1 million. To return money to investors, the shopping centers have to be sold at lower prices, which in turn lead to their closure.
High rent and poor customer service to customers are other few reasons that are leading to shopping centers being shut down.
The UK shopping centers have to change to avoid been labeled as ghost malls. However, some are adopting new trends such as indoor ski slopes and ice Ricking. For those who are already shut down, they could still stand as schools or libraries instead of decaying in a large tract of land. In the long run, the local communities and investors need to look for long term solutions.