A shopping mall, or simply put, a mall, is a large indoor or enclosed shopping area, usually anchored by department stores (anchor and brand stores). They are a group of stores under a covered plaza. The term originally referred to a pedestrian promenade or strip mall with shops along a street on both sides. Large shopping malls are now experiencing a high rate of vacancies while some are totally closing down due to bankruptcy, especially in the western world.
Many UK shopping malls are struggling and seeing significant store closures due to online shopping, changing consumer habits, and high rents, leading some centers to decline or face demolition, while others are adapting mixed-use redevelopments like housing, leisure, green space etc, to survive, rather than closing down entirely en masse.
While individual stores and some centres are closing, the overall trend involves transformation and a shift in focus for physical retail spaces, with a decrease in net closures in 2024 compared to 2023 according to Price Waterhouse Coopers (PwC) UK. These are the results of decline in footfall and closures as online shopping and reduced high-street presence have long been issues, accelerated by the 2019 pandemic, leading to store closures for many brands like River Island, New Look, and Millets in 2025.
Some centres, like Broadmarsh in Nottingham or Guildhall in Stafford, have faced severe decline, with some large centres (around 60 of 500) potentially facing demolition. Vacant centres are being redeveloped into spaces with housing, offices, hotels, healthcare, and more green areas, integrating retail rather than solely relying on it. While the closure rate is still high, the total number of chain store closures decreased in 2024, hitting the second-lowest level in a decade, as the market slightly balances.
With over 17,300 shops in the UK expected to close down before the end of 2025, costing about 200,000 jobs, some towns and cities are already considering ways of redeveloping the spaces into a mixture of flats and offices, and retail space to reduce voids. An estimated 8,543 retail stores in the United Kingdom closed throughout 2024. River Island and New Look are two of the hundreds of shops that have already shut down.
While the retail spaces are becoming wasteland like the sites of over 50,000 vacant properties in Nigeria, some owners are converting their empty spaces to other land uses to avoid keeping them as wasteland! High street shops may be collapsing and closing in the UK, but more retail parks are opening, even in this modern age of online shopping stated PwC UK (Store Opening and Closures 2024). This means that store insolvency and liquidation is a matter of location.
Germany’s smaller retailers are also struggling in a “David versus Goliath” battle against big online and physical stores. Meanwhile, things are looking up for the country’s restaurant chains. Esprit, a relatively large clothing chain, closed the last of its stores in Germany earlier this year as Germany’s retail sector is facing a new wave of bankruptcies, with 2,490 insolvency recorded between August 2024 and August 2025.
The figure nearly matches the record set a decade ago, a study by Allianz Trade, an insurer in Germany, showed. The insurer said smaller shops in particular were struggling in an uphill battle against big online marketplaces as high investment costs for digital upgrades and automation weigh heavily. German store closures have accelerated the decline in economic performance.
The retail sector is still struggling with the profound changes to its business model that began during the pandemic. To withstand the intensified competition from major online marketplaces, retailers have to invest heavily in digital channels, data-driven merchandising and innovative technologies for store design.
Many chains are introducing autonomous warehouse systems, AI-based product recommendation tools and robotic shelf-scanners. Others are testing self-navigating service robots on the shop floor to help customers find items. All these are efforts to attract customers. The management of a shopping mall in Berlin converted over 20 percent of its overall spaces into hotel rooms to reduce voids.
The widespread closure of retail stores in the United States, often referred to as the “retail apocalypse” is driven by a combination of factors, including the rise of e-commerce, economic pressures like inflation, rising interest rates, and strategic missteps by retailers. Rise of e-commerce due to the shift in consumer habits toward online shopping. These are the primary drivers.
Online retailers like Amazon, Alibaba, Temu and Shein offer convenience, wider variety, and often better prices, significantly reducing foot traffic in physical stores and capturing a larger share of consumer spending. Economic pressures on consumers is also a factor. High inflation rate has driven up the cost of goods, squeezing consumer budgets and leaving less disposable income for non-essential purchases, while high rate of unemployment, stagnant wages and high debt for many middle- and low- income households and low wages have not kept pace with the rising costs of living, healthcare, and education, leading to increased household debt and more cautious spending habits.
Also, rising operational costs for retailers who face increasing costs for labour, rent and supplies are leading them to adopt internet marketing space like Facebook Marketplace, Tiktok and websites like Littlewoods. High commercial rents in some areas can make operating a physical store unfeasible, especially where sales are declining. Some developers of shopping malls made strategic missteps due to wrong locational choices and high debt.
Over-expansion of many chains which expanded too aggressively during past periods of growth, leading to an oversupply of retail spaces and locations that are no longer profitable is also contributing to closures. In 2017, in America alone, over 12,000 shopping malls closed. Failure to adopt technology by some retailers that were slow to pivot to an online strategy, offered poor in-store customer service, or which failed to create engaging shopping experiences have left them struggling to compete with more innovative brands.
Debt burdens of many long-standing retailers are weighing them down to the extent that they have to close up. High interest, significant debt often results in private equity buyouts. High interest rates have made this debt more expensive to manage, giving these companies little financial cushion to survive downturns. Intense competition faced by mid-sized and smaller chains are fierce from large, efficient big-box retailers (Walmart, Costco, Home Depot) and e-commerce giants, which can leverage their scale to offer lower prices and invest heavily in technology and logistics.
In essence, the closures are part of a broader “retail reset” where the industry is adjusting its physical footprint to align with new economic realities and permanently changed consumer behaviors. The greatest concern of shoppers is security. When some stores are vacant for a long time in a shopping mall, there is a high probability that other stores will follow suit.
There is nothing a shopping mall operator can do to this. The solution is to look for ways to convert the spaces left into other uses like hotel, education, hospital, warehouse, residential, office or restaurant.
