US Retail | The great mall bifurcation: Why “US malls” is the wrong headline 

If you want to understand the state of the American shopping mall, look at the food court.

In one mall, it’s full. Parents circling for tables, teenagers queuing for bubble tea, a lunchtime rush that feels suspiciously pre-pandemic. In another, it’s quiet enough to hear the hum of the lights. A Panda Express holding the line while the rest of the unit quietly gives up.

Both are “US malls”.

Only one of them is thriving.

This is the problem with the headline “the mall is back” and equally, “the mall is dead.” They’re both wrong. The American mall didn’t recover or collapse. It split.

What we’re seeing now isn’t a comeback. It’s a bifurcation.

The modern US mall market is no longer one category. It has separated into two very different worlds:

• Top-tier, well-located, well-capitalised malls, still attracting footfall, investment, and retailer demand
• Mid- and lower-tier assets, facing structural pressure, repositioning, or outright reinvention

Lumping them together under “US malls” is like talking about “airlines” without distinguishing between first class Delta Airlines and the cheap fares zero frills approach of Spirit Airlines. Worlds apart.

The numbers don’t lie. But they do diverge

The performance gap between mall tiers is no longer subtle. It’s structural.

According to Cushman & Wakefield, citing Green Street data, occupancy levels tell a very clear story:

• A-rated malls: ~95% occupancy
• B-rated malls: ~89% occupancy
• C-rated malls and below: ~72% occupancy

This isn’t just a post-pandemic hangover. It’s a long-term sorting process. Retailers are rationalising portfolios, investors are concentrating capital, and consumers are voting with their feet — often quite literally.

The result: strong malls get stronger, while the middle of the market feels increasingly fragile.

That means more than…

80% of retail spending still happens offline.

The shift to online didn’t make physical retail obsolete. It made it less forgiving. Average malls, average locations, average experiences, average execution, lost their margin for error.

In other words, e-commerce didn’t kill malls. It simply removed the safety net.

Retail footfall hasn’t vanished. It’s been redistributed.

Another misconception: that shoppers stopped showing up. In reality, they just became choosier.

Foot traffic data from Placer.ai shows that recovery varies significantly by retail format:

• Open-air shopping centres: Q1 2025 visits were only ~2.0% below Q1 2019
• Indoor malls: Q1 2025 visits remained ~7.4% below 2019 levels
• Visit duration, however, nearly recovered — just ~2.9% shorter than pre-pandemic

People still go out. They just concentrate their time and money in places that feel worth the trip.

This is where bifurcation becomes visible on the ground. The winners feel busy. The rest feel… managed.

At the top end of the market, Class A malls increasingly function as platforms, not just properties.

They are destinations. Social spaces. Event venues. Mixed-use ecosystems. What Newmark describes as “third places”, environments that justify presence beyond transactions.

These assets benefit from:

• Concentrated retailer demand
• Strong income demographics
• Ongoing reinvestment
• Professionalised, data-driven operations

Meanwhile, further down the curve, many malls are transitioning into something else entirely.

Healthcare. Education. Residential. Municipal services. Logistics. In these cases, the mall doesn’t “fail”, it changes category.

Some malls become lifestyle destinations. Others become planning applications.

The invisible differentiator: execution

What rarely makes headlines is how operational complexity has increased, even in the malls that are doing well.

More events. More vendors. More compliance. More data. More stakeholders. More expectations.

In a bifurcated market, execution becomes the quiet competitive advantage.

The malls that appear calm from the outside often aren’t quieter; they’re simply better coordinated. Less chasing. Fewer blind spots. Fewer heroic interventions to keep things moving.

This is the invisible layer shoppers never see, but staff experience every day.

For operators, complexity is now the norm. Managing a mall looks less like running a building and more like running a small town.

For leasing teams, data matters. Performance storytelling matters. Speed matters. In a concentrated demand environment attracting the right tenant-mix can be make or break.

The shopping mall didn’t die. It sorted itself out.

The American mall isn’t back.

It’s not gone either.

It’s simply stopped pretending it was one thing.

Some malls are thriving. Some are transitioning. Some are struggling. All of them exist under the same headline, which is exactly why that headline no longer works.

If there’s one takeaway from the great mall bifurcation, it’s this:

The future of US shopping centres won’t be decided by retail alone, but by how well complexity is managed behind the scenes.

And that, quietly, is where the real divide now lies.