NEW YORK — The growing fear over a new virus has transformed busy streets and shopping centers into ghost towns in parts of China, Japan and Italy.
Now, with the virus spreading in the U.S., it could deal a major blow to the country’s more than 1,000 malls at time when many are already struggling with a slew of retail bankruptcies. New diagnoses of the disease in several U.S. states have raised the tally of cases to more than 100.
Big malls like American Dream and Mall of America and mall owner Taubman Centers Inc. say they’re adding hand sanitizer stations, and they’ve also stepped up disinfecting high-touch areas such as doors and handrails. The International Council of Shopping Centers said its members are following guidelines from the Centers for Disease Control and Prevention.
Shopping centers may have to take more extreme precautions, such as temporary closures, said Coye Nokes, a partner at OC&C Strategy Consultants’ consumer and retail practice.
“While the brands and retailers can attempt to mitigate the impact via other channels like e-commerce, malls themselves will struggle with traffic under any extended virus scenario,” she said.
Target, Walmart and other discounters and pharmacy chains have reported big crowds of customers stocking up on basics such as hand sanitizers and canned goods. But shoppers could yet get scared and stay home. A new survey by Coresight Research, a global research firm, hints at troubles ahead for shopping malls as the virus spreads.
Almost 28 percent of nearly 2,000 U.S. internet users aged 18 and older surveyed in late February by Coresight Research said they were cutting back on visits to malls, workplaces and entertainment venues or changing their travel arrangements. Nearly 60 percent said they’re likely to take similar actions if the virus outbreak worsens.
A worsening of the outbreak would hit malls disproportionately, the research suggests. Among those likely to change habits if the outbreak worsens, around three quarters expect to avoid shopping complexes, making this the most-avoided type of location.
The rising fear comes at a time when malls are dealing with a wide gap between top quality malls and low-end malls. While vacancies at top malls have remained tight, at 2.2 percent, the bottom rung is struggling with an average vacancy rate of 7.5 percent, according to Kevin Cody, senior consultant at retail research firm CoStar Group.
