I remember when the US Census Bureau first started reporting retail sales for e-commerce in the 1990s and it was less than 1%. They just updated data for 2015 and report that e-commerce retail sales represent 7.2% of total sales for 2015 (it was 6.4% in 2014). That doesn't seem like a lot to me. In contrast, the US Census Bureau reports that for 2015, e-commerce sales of merchant wholesalers represented 30.2% of total sales (it was 28.1% in 2014).
Are retail e-commerce sales going to increase to the point were 25% of US malls will close in the next five years? Seems high to me. I expect re-purposing where, perhaps, we might do more online shopping while at the mall looking at samples of what we can buy, and getting a latte and recharging our smartphones. That would use less retail space. Malls might add more ways for people to hang out - activities, fairs, etc.
Tax implications? A few:
- More online shopping can mean more uncollected use tax although I suspect a lot of the e-commerce growth will be with Amazon that collects tax in all states (at least on their direct sales).
- If malls turn into abandoned buildings or vacant lots, property taxes will go down. Is there another need for them? With an aging population, perhaps the space gets turned into living spaces for older folks - single level, close to public transportation and medical facilities, etc.
What do you think? Will we see 25% of malls close? What will happen to the space?
*For some nostalgia, see this June 2008 blog post on some trends relevant to tax reform.
2 comments:
I already see many malls dying, but I think it's a slower death than 5 years, as some stores still prosper. I think they will change to accommodate different types of vendors and that will slow down their eventual closure.
Greg, good point. Thanks for posting.
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