Retailers are shifting strategies as shopping malls experience declining foot traffic and changing consumer habits. Walmart has taken a significant step by purchasing Monroeville Mall near Pittsburgh for $34 million, with plans to redevelop the area into a mixed-use space. This acquisition reflects the broader trend of retail adaptation, where companies seek innovative ways to utilize large commercial properties. The move will likely impact existing tenants and could signal a shift in how major retailers approach real estate investment.
Walmart’s acquisition of Monroeville Mall follows previous instances of retailers repurposing shopping centers. Over the past decade, companies have explored mixed-use development, incorporating residential, dining, and entertainment options alongside traditional retail. While some malls have been converted into fulfillment centers, others have been redesigned as community hubs. The decline of brick-and-mortar shopping due to eCommerce growth has pushed major retailers to consider alternative uses for large retail spaces, leading to more acquisitions like Walmart’s latest purchase.
What are Walmart’s plans for Monroeville Mall?
Walmart aims to transform the Monroeville Mall property to accommodate retail, dining, and potential residential units. The 985,073-square-foot mall currently houses 133 stores, including Dick’s Sporting Goods, Macy’s, Best Buy, Barnes & Noble, Forever 21, Victoria’s Secret, and JCPenney. The mall, along with its 185,517-square-foot Annex, attracted approximately 3.5 million visitors in 2023. While specific redevelopment details remain undisclosed, Walmart’s investment suggests a long-term strategy to diversify the site’s usage.
How does this compare to other retail strategies?
Retailers have pursued different approaches when dealing with struggling malls. Amazon (NASDAQ:AMZN), for instance, has acquired former mall properties and repurposed them into fulfillment centers. Between 2016 and 2019, Amazon converted about 25 malls into distribution hubs, targeting locations in Baton Rouge, Knoxville, and Worcester. This strategy allows the eCommerce giant to utilize large, centrally located spaces for logistics operations. In contrast, Walmart’s approach suggests an interest in maintaining a shopping and community-oriented function for Monroeville Mall.
Industry analysts have noted a shift toward mixed-use developments, where retail spaces integrate residential, office, and entertainment options. Mall expert Paco Underhill stated that the future of malls could involve multifunctional spaces that serve as “hubs” for various activities beyond retail.
“U.S. malls are facing challenges with vacancies, declining foot traffic, and more competition from eCommerce,” Underhill said. “There will be more mixed-use developments where malls serve as hubs for various activities beyond shopping, including incorporating housing, offices, healthcare facilities, and even government buildings.”
Walmart’s decision to invest in Monroeville Mall indicates a strategic long-term commitment to adapting to changing retail trends. While some retailers are scaling back physical retail operations, Walmart appears to be leveraging real estate assets for future growth. Whether this redevelopment will attract more foot traffic remains to be seen, but the move aligns with efforts to sustain the relevance of brick-and-mortar spaces. Consumers and businesses will closely watch how Walmart reconfigures the site and whether such investments set a precedent for similar retail transformations.
