Will increasing mall traffic hit a speed bump due to the Delta variant?
Simon Property Group announced that shoppers returned to malls in the second quarter as though it was 2019 and the novel coronavirus pandemic had never happened.
David Simon, CEO of the mall operator, told analysts on the company’s earnings call yesterday that footfall was up around 80 percent from last year and that traffic in some locations was actually higher than it had been during the same period in 2019, CNBC reports.
The mall giant’s 91.8 percent occupancy rate still remains below last year’s 92.9 percent and subsequent store closings tied to retailer bankruptcies. Simon’s occupancy rate two years ago stood at 94.4 percent.
Mr. Simon said his company was digging out of the large hole created by the pandemic but that he was encouraged by a pick up in demand for open space inside its shopping centers.
A potential obstacle facing Simon’s malls is the rapid spread of the Delta variant across many communities. The spread of the variant is particularly pronounced in states where COVID-19 vaccination rates are low.
A CNN report cited a briefing yesterday by Jeff Zients, COVID-19 coordinator for the White House, during which he said that the seven states with the lowest rates of vaccinations accounted for more than 17 percent of new cases in the past week despite only representing 8.5 percent of the national population. He pointed out that one in three cases occurred in Florida and Texas where one governor is threatening to withhold funds from school districts that mandate students wear masks and the other has signed an executive order barring local governments and agencies from imposing mask mandates even in the face of spiking cases.
Mr. Simon said that his company’s malls “would mask up” where it was needed, but cautioned that his company’s properties and others should not be made a scapegoat as cases rise in some places.
He pointed to the spread of the Delta variant in Florida, Yahoo Finance reports, and said there has not been “an uptick in COVID cases for the people that are in the mall, the staff, whether it’s a retail or a management team, period, end of the story. No question about that. So, I personally think that people are just going to deal with Delta. I’m hopeful that people will get vaccinated. We’re not going to mandate vaccines; we’re going to encourage them.”
- Simon Property Group Reports Second Quarter 2021 Results And Increases Full Year 2021 Guidance And Raises Quarterly Dividend – Simon Property Group
- Simon Property Group, Inc. (SPG) CEO David Simon on Q2 2021 Earnings Call Transcript – Seeking Alpha
- Mall owner Simon Property says sales at its centers returned to pre-pandemic levels in June – CNBC
- Malls have been mistreated during the COVID-19 pandemic: Simon Property Group CEO – Yahoo Finance
- Florida and Texas had one-third of all US Covid-19 cases in past week, official says – CNN
- Two Florida school districts drop mask mandates after DeSantis threatened to withhold funding – Fox 13 Tampa Bay
- Texas Gov. Abbott threatens fines again against local officials and businesses that enforce mask mandates, vaccine requirements – CNBC
DISCUSSION QUESTIONS: Will the Delta variant cause changes in shopping behaviors among consumers in places where there has been a pronounced increase in cases? How, if at all, do you see this affecting traffic to enclosed shopping malls?