The Death of the Shopping Mall in 3 Charts

3 charts reveal why the shopping mall may go extinct.

Mar 16, 2014 at 1:20PM


Photo: A Syn

Sbarro, a pizza retailer known for its presence in shopping malls is bankrupt – again. It cited a decline in mall traffic for its second bankruptcy in just three years.

It's a worrying sign for traditional retail. Malls aren't so "hip" any more.

Losing the core customer
Market research firm ShopperTrak measures mall and store traffic at more than 800,000 malls and stores around the country. In the last few years, its data has revealed a precipitous decline in fourth quarter holiday shopping -- the kind of shoppers retailers need to be profitable.


Traffic as percentage of 2010 traffic. Source: ShopperTrak. Photo: YisongYue

As traffic declines, vacancies at major malls are elevated. Reis Reports data reveals vacancies at regional malls are just now crossing back into levels not seen since 2009. Vacancies at strip malls -- outlets in which each store entrance is outside -- have yet to recover to their pre-recession levels.


Source: Calculated Risk Blog

Blame the Internet?
Surprisingly, weak trends in malls of all kinds seem to have minimal effect on other types of retail outlets. Realty Income Corp. (NYSE:O), which leases property to a myriad of business from fast food joints to drug stores, reported a vacancy rate of just 1.8% in February.

For its part, Realty Income Corp. is managed by smart operators. The company steers away from traditional mall retailers, seeking out good tenants like dollar stores to stay recession- and Internet-resistant.

Although malls have yet to go the way of the dinosaur, online shopping is taking a greater share of shoppers' wallets. The Bureau of Labor Statistics reports that e-commerce made up 6% of all retail sales in 2013, up from just 3.5% in 2008. And growth has been consistent -- e-commerce grew in all but three quarters of the last 7 years.


Data from Photo Credit: HM Revenue & Customs

From mall rats to real estate investors, this is a trend that should be carefully studied. Malls appear to be in a secular, and persistent, decline. Sbarro may be the first victim of declining malls, but it certainly won't be the last.

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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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