Arizona’s Retail Performance Could Predict How Industry Rebounds

By Brandon Brown | Phoenix Business Journal

The Macerich Co., which owns some of the largest shopping malls and retail centers in the Valley and across the country, is hoping its Arizona portfolio will be a crystal ball to how the retail industry will bounce back after the Covid-19 pandemic.

Because of fewer government-imposed Covid-related restrictions in the state, Macerich’s executives said its properties in Arizona were a lot busier than in other parts of the country. Because of that jump start, they are looking at their Arizona assets as a precursor for the rest of the portfolio’s performance. Scottsdale Fashion Square, Kierland Commons, Arrowhead Towne Center, Chandler Fashion Center and the Biltmore Fashion Park are just a handful of the 15 Macerich-owned properties in Arizona.

“During the first quarter of ‘21, excluding food and beverage, sales in Arizona were 11.5% higher than the first quarter of 2019,” Macerich CEO Tom O’Hern said on a May 11 call with investors. “Looking at the month of March, just the month of March 2021, sales in Arizona were 18% higher than March of 2019. To say there is pent-up consumer demand is an understatement.”

Macerich – like most companies that were significantly impacted by the pandemic – isn’t comparing 2021 to 2020, but rather to 2019. That way, it is easier to tell when metrics are back to pre-Covid levels.

During the pandemic, consumer shopping habits changed in a lot of ways, with many turning to online shopping and e-commerce at even higher rates than before. The debate in the retail industry has been whether or not people will come back to brick-and-mortar stores and malls after Covid-19 conditions start to clear up or whether they’ll keep shopping primarily online going forward.

Based off how Macerich’s properties around the Valley and the state did during the first quarter of 2021, and especially in March, the company’s executives think shoppers will come back to brick-and-mortar retail in a big way.

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