Outlets drive high traffic with special events like Simon's National Outlet Day this month.
High prices are keeping consumers wallets in their pockets and their cars in the driveway as mall traffic dropped for the fourth consecutive month.
Discretionary spending remains on hold in retail’s clothing, footwear, and household goods categories, according to Placer.ai’s May Mall Index report. Traffic at indoor malls fell 12.2% compared to May 2022, and outlet centers dropped by 10.7%.
Median visit lengths, however, increased by 5.5% at outlets and 3.6% at open-air lifestyle centers, indicating that consumers are waiting longer for prices and interest rates to drop before making large purchases.
“The increase in visit time could mean that consumers are making fewer trips to the mall because they are maximizing each visit and stopping by all their favorite stores, dining concepts, and entertainment venues on each trip,” said Placer.ai analyst Shira Petrack. “In other words, the quality of visits may be increasing even as the quantity of visits stagnates.”
Sales events at all three of these retail real estate sectors, for instance, drew large attendances. During the week of Valentine’s Day, traffic at outlets was up by 23% over the previous week and indoor malls and open-air centers both experienced 16% increases. Similar jumps in traffic were recorded during the weeks of St. Patrick’s Day and Mother’s Day.
It’s an indication that consumers appear to be holding back on merchandise purchases while continuing to spend on food-and-beverage, entertainment, and services, according to the foot traffic analytics provider.
“In the current economy, many shoppers appear to prioritize value,” Petrack noted. “That could explain why outlet malls receive such a traffic boost during holidays as consumers look to take advantage of the double discounts offered by the outlet format during these happenings.”
If the economy stays in a holding pattern, outlet centers could look forward to being big winners in late summer’s back-to-school shopping surge.