A: After two years of steady declines in mall foot traffic, 2022 saw a resurgence, with 3.1 billion visits throughout the year. Despite foot traffic being up 35 per cent from 2021, we are still down 28 per cent from pre-pandemic 2019 levels. Even with the decreased foot traffic, we’re witnessing above-average retail sales increases of 12 per cent (adjusted for inflation) since 2019. This is leading to much more purposeful shopping trips from customers with increased spend per visit and higher basket counts.
However, while some mall types have bounced back quite well, others are still far behind pre-pandemic levels. Mixed-use and downtown malls, despite having solid year-over-year increases, are still 50 per cent down from pre-pandemic levels. The worry for many downtown retailers and QSRs is that with the changing geography of the workplace and hybrid work schedules, this may curtail further traffic level improvement at downtown properties.
Super-regional malls, on the other hand, grew the most out of any mall type, with an increased visitation of 55 per cent on the year, and are now only 14 per cent behind 2019 metrics. In fact, November and December of 2022 saw the highest foot traffic numbers in nearly three years, surpassing 2019.
When we look at mall format—indoor vs. outdoor, or downtown vs. suburban, we see a very clear pattern of dominance that follows pandemic regulations. Outdoor malls did better at the height of the pandemic, while indoor ones fared better once retail restrictions were dropped in the summer of 2021. However, indoor downtown malls did not recover as strongly as their indoor suburban counterparts due to unique conditions experienced downtown.
As we compare foot traffic metrics with the return to work, the trends are pretty telling. Worker trends across Canada’s biggest cities and downtown cores are recovering, albeit very slowly. While the majority of Canada’s downtowns are currently operating on 50 to 65 per cent capacity, the suburbs have fared much better. Suburb worker capacity ranges by region, but many are on par or slightly below what was seen pre-pandemic. This has implications, especially for the largest downtown malls that benefitted greatly from the prior influx of workers who lived both downtown and farther afield, who may now be working from home on a hybrid or remote schedule. Downtown malls would have lost a complement of transient, impulse shoppers who in the past happened to be visiting as part of their normal routine.
If we look at trends in daypart visitation, we start to see a proportional shift in traffic from weekdays to weekends. While there is less overall traffic at downtown malls, a higher proportion of that traffic is now weekend- instead of weekday-focused. The same trend is seen in the large suburban malls but is not as pronounced.
While daypart visitation plays a huge role in operationalizing your retail or QSR location, a better understanding of the type of mall visitors can position your business for success moving forward. The nuances between a suburban visitor and urban visitor can contrast greatly, as can their spending patterns when it comes to restaurants or clothing, as an example.
While the recovery and challenge to bring downtown workers back into the office remain, there are some recent signs of optimism, with a number of major banks calling on their employees to increase their in-office presence in order to increase productivity. This will undoubtedly help the mixed-use centres and downtown malls in their bid to increase their foot traffic and return to pre-pandemic visitation levels.
Michael Scida
Director, Retail Business Development
Environics Analytics