Shopping malls evolving into entertainment destinations

Demand for retail space continues to fall. Free-standing stores that were once popular are closing and empty strip malls are on the rise. Once mainstays of the average teenager and even gathering places for many adults, shopping malls are also paying the price of the recession. But all hope may not be lost, as restaurant chains are moving in to fill the vacancies and help sure up business.

Shopping mall history

The history of shopping malls dates back to ancient times. Trajan's Market in Rome is believed to be one of the world's oldest shopping malls, having been built around 100-110 AD by Appollodorus of Damascus. Ancient Romans frequently shopped at public shopping centers that grouped markets together into one forum. Other outdoor covered markets were widespread in many areas of the world, from Paris to Oxford.

The concept for the indoor shopping mall grew in urban centers. It is believed an early indoor mall prototype called the Lake View Store in Duluth, Minn. in 1916 was a trailblazer. It had three stories, and stores filled all levels. As city dwellers increasingly left cities for the suburbs, shopping malls sprouted up in suburban locales, where they would become popular gathering places. The first fully enclosed shopping mall in Canada was called Wellington Square. Opened in Ontario on August 11, 1960, Wellington Square was designed as an enclosed mall with a department store anchor and subterranean parking. After several renovations, it remains open even today and it is known as Citi Plaza.

Evolution of shopping malls

When the economy is thriving, shopping malls tend to flourish. However, when the economy struggles, retailers suffer, and shopping malls suffer alongside them. Across the United States, roughly a half billion square feet of retail space is empty. Part of this is due to the increase of retail space that was spurred by a booming economy. However, now many communities have more shops and stores than local residents can support. Vacancies are an inevitable consequence of a boom that goes bust.

Although enclosed shopping centers are faring better than strip malls according to many financial analysts, retailers in traditional shopping malls are still hurting. Maintaining occupancy levels in malls has been challenging. Now that consumers are being more cautious, retailers simply cannot afford to keep business thriving.

But it is not all doom and gloom for shopping malls. While clothing and shoe shops may be saying farewell, many restaurants, most notably chain establishments, are moving in and occupying formerly vacant retail space. Much in the way that movies released during the Great Depression were about fun times and enjoying oneself, shopping malls are now catering to a feel-good atmosphere. Roughly 16 percent of mall space is now being leased to restaurants, according to CoStar Group. Entertainment options, from movie theaters to arcades to sports venues, also are taking up occupancy in shopping malls. Entertainment venues are helping to drive the growth of malls and also to help keep them viable. Some business analysts have called this expanded mall concept the mall of the new millennium. However, these entertainment meccas are largely limited to higher-end malls.

As the economy slowly recovers, entertainment malls may become more the norm than the exception. Plus, these alternative entertainment source renters may help traditional retailers return to the mall environment and once again find success.