Outlet Malls Face Challenges Amid Changing Retail Landscape

Outlet malls, a fixture of American shopping since the 1930s, are experiencing significant challenges in the current retail environment. Originally linked to factories, these centers offered discounted merchandise to employees before expanding to the general public. By 2023, the U.S. outlet industry had grown to a substantial $64.9 billion, with 342 centers nationwide, according to IBISWorld. Stephen Yalof, CEO of Tanger Outlets, noted that outlet shoppers are typically aspirational consumers seeking beloved brands at competitive prices. However, the COVID-19 pandemic and the surge of e-commerce platforms like Amazon and Shein have taken a toll on outlet malls. The shift towards online shopping has diverted customers away from physical retail spaces, impacting foot traffic and sales. Additionally, the economic strain caused by historically high inflation has further limited consumers' spending power, making it difficult for outlet malls to attract and retain shoppers. In contrast, traditional indoor malls and open-air shopping centers have shown a more robust recovery post-pandemic. Data from Placer.ai indicates that these venues have managed to bounce back more effectively than outlet malls, which continue to struggle in regaining their pre-pandemic visitor levels. As the retail landscape evolves, outlet malls must adapt to the changing preferences of consumers and the competitive pressures from online shopping to remain relevant in the market.