The doors of indoor malls flew open in Texas on May 1, giving the state’s retailers nearly two months of sales activity before New Jersey properties were permitted to do the same. Shoppers returned, but the scenes today within the malls are different than the timing of the reopenings might indicate. Mall attendance in New Jersey is now higher than in Texas, and economist Bruce Mizrach suggests that the tipping of the scale has more to do with consumer comfort than government permission.
Mizrach, a professor of economics at Rutgers University who focuses on market microstructure and behavioral finance, examined adjusted SafeGraph data on 31 malls in New Jersey and 46 in Texas and found that attendance on the date that indoor malls reopened in New Jersey was 56,157 while in Texas it was 55,141, despite being 20 percent higher the week before.
“You can open stores, bars, et cetera, but if people perceive it as a dangerous, they’re not going to go whether the government says they can or not,” Mizrach said. “When the New Jersey malls shut down in March, there were 267 [COVID-19] cases that week. In the time we evaluated in Texas, there were 46,000 that week and the malls are still open.
“But people aren’t going – so with the surge, the business dropped down to where they were when they reopened back in May. In June/July 2020, you’ll see New Jersey malls are in better shape compared to a year ago than the Texas malls are,” Mizrach said.
SafeGraph draws data from more than 45 million cellphone users across the U.S. It anonymously tallies visits to malls, restaurants, and other points of interest using the location the phones register. Accuracy fluctuates depending on whether cellphone users’ location services are on, but not by much – between 3 feet and 50 feet of accuracy – so although the data can’t tell researchers which stores they’re at, they can at least see that they’re at the mall.
According to SafeGraph, overall mall visits – including strip malls – were up 19.2 percent during the first week of reopening, and some large indoor shopping malls in central and northern Jersey had gangbusters traffic compared to the days of their mandated closures: Bridgewater Commons brought in 110 percent more people from June 29 to July 5 than the previous week. In the same week, Garden State Plaza brought in 290 percent more people, and Menlo Park Mall brought in 537 percent more people than the previous week.
Five malls, including Hamilton strip mall Hamilton Marketplace and the mid-size Moorestown Mall, had a slight decline in visits. And overall, visits were still down 34 percent year over year. But for the same time in Texas – again, with malls wide open – visits are down 55 percent, and only 4 percent up from what they were upon reopening on May 1.
All the progress Texan malls made was undone. One lesson, Mizrach said, is that folks are making their own public health decisions. “It shows that not only is premature opening a poor choice from a public health standpoint, it’s a poor choice from an economic standpoint,” he explained.
Cherry Hill Mall’s attendance is approximately 76 percent of what it was at this time last year, according to Joseph Coradino, chairman and CEO of PREIT, which operates the mall and others in Pennsylvania, Maryland, and Michigan. It’s steadily improving as more stores open.
“We are seeing that shoppers are purposeful and if they come, they intend to purchase, so while trip visits are maybe not yet at the same level as they had been, retailers are reporting strong sales and conversion rates across our portfolio, particularly in the early stages of reopening,” Coradino told NJBIZ via email.
To cultivate consumer confidence, PREIT is putting safety at the forefront of the customer experience.
“We are taking every precaution possible including offering free masks, increasing outside air exchanges, increased sanitizing efforts and sanitizing stations throughout the property. Additionally, our Mall2Go contactless pickup option is here to stay,” he said.
With Mall2Go, customers place orders with one of 22 participating retailers and five restaurants and pick it up contact-free from designated spots in the mall’s parking deck.
At the Mall at Short Hills, traffic has been “terrific” since reopening, said Marketing & Sponsorship Director Janet Cesario, citing turnout at or above normal levels for this time of year. The property is even seeing customers who had never previously shopped at Short Hills.
Cesario, like Coradino, highlighted cleanliness as a leading way to instill consumer confidence. “To help people feel comfortable shopping at malls, landlords must take the care to install protocols that minimize risk for their shoppers and employees,” she said.
In addition to sanitizing high-touch surfaces, enforcing rules about mask-wearing and social distancing, and closing off areas where congregation may occur, the Mall at Short Hills is keeping its doors propped open for better airflow and changing its HVAC filters throughout the property. Several mall tenants have a curbside pickup program as well.
If the decline in Texas mall attendance indicated less consumer comfort, as Mizrach believes, the heightened focus on safety is a boon to New Jersey’s own.
“The economist definitely puts the consumer at the center of his or her analysis. We see consumers trying to make informed decisions, and we know that they’re trying to inform themselves,” Mizrach said.
“Everyone over the age of 40 is keeping themselves informed about the COVID trend in their neighborhood, and we see quick changes to consumer behavior to the COVID rates in their environment. We see it in Texas. We see states shut down on a different schedule … we saw people stop shopping in places where malls hadn’t shut down because they were fearful of the disease.
“There’s some business in your neighborhood that provides whatever service – dry cleaning. If the workers aren’t wearing masks, you’re going to take your business somewhere else. People are definitely informed about COVID, and if they’re given the choice, they’ll pick the place that’s least likely to pass them the infection,” Mizrach said.