The presence of numerous shopping malls in the heart of the capital city Kuala Lumpur has led to overcrowding and the subsequent emptiness of many of these malls. According to an expose by Al Jazeera, Goh Sook Lam, the owner of a computer shop in 3 Damansara mall, expressed his concerns about the lack of foot traffic in the mall. Despite events like taekwondo tournaments on the lower levels, the upper levels of the mall remain eerily quiet.
Goh, who heavily relies on his regular customers, mentioned that random walk-ins are scarce, sometimes resulting in him not even breaking even. He shared that on that particular day, he only had one customer, Rudi Sim, visiting his shop.
Unfortunately, Goh is not the only one feeling the impact of dwindling visitors in Malaysian shopping malls. With over 1,000 shopping malls expected to be in operation by the end of 2023, many new malls are being constructed while existing ones struggle to attract crowds. In Kuala Lumpur alone, there are 727 shopping malls, showcasing the saturation of the market.
While some major shopping malls still enjoy high foot traffic and nearly full occupancy rates, tenants in less popular malls are now grappling to stay afloat. The retail space in Malaysia has increased to 17.69 million square meters in 2023, but the occupancy rate is lower than pre-pandemic levels, standing at 77.4% last year.
Some businesses are striving to survive in less popular malls like Glo Damansara. Veronica David, who runs a café with her husband, shared that their business is thriving despite the mall’s quiet atmosphere. They chose the location due to its affordable rent and friendly mall management.
Phang Sau Lian, President of the Malaysian Shopping Mall Association, emphasized that retailers need to work harder to stand out in such circumstances. She highlighted the need for malls to constantly adapt to remain relevant as consumer trends evolve rapidly.
The latest trend shows a nearly 30% increase in the percentage of retail space leased by food and beverage outlets. Foo Gee Jen, an advisor at real estate consultancy firm CBRE-WTW, noted that consumers now seek experiences beyond just shopping. Older malls need to be upgraded to stay competitive.
Despite Malaysia’s economy growing by only 3.7% last year, the construction of shopping malls shows no signs of slowing down. At least 33 new shopping malls with 1.13 million square meters of retail space are in the planning stages in KL.
Goh, whose shop is located near a closed cinema, is now considering moving to a lower level with the same rental rate or finding a new location within the mall. As the landscape of shopping malls continues to evolve, businesses like Goh’s will need to adapt to survive in the changing retail environment.