Does the idea of going to the mall no longer fill you with a sense of excitement and wonder? That was the case for a long time for a lot of people; indeed, it happened to me when arcades stopped being a thing. But for mall giant Simon Property Group (SPG), the mall is actually starting to make a comeback, led by Gen Z shoppers, who want that in-person touch once more. Simon shares gained modestly as a result.
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A report from CNBC offered the unexpected bit of good news for the brick-and-mortar shopping experience, noting that Gen Z may be “digital natives” who cannot remember a time without the internet but still turn to stores in surprisingly large numbers. In fact, a report from the International Council of Shopping Centers revealed that Gen Z will hit physical stores every bit as often as Baby Boomers do.
It turns out that Gen Z shoppers—who are regarded as the up-and-comers as far as disposable income goes—like the social aspects of shopping, as well as the instant gratification effects of shopping for a thing in the same place where you pay for it. So mall owners, trying to pull in the Gen Z crowd, are offering up new features and experiences, from selfie mirrors to small concerts.
It May Be Working
The good news for the giant malls is that such plans may be working. Retail Dive reported that Simon malls actually saw a boost in traffic during the Black Friday shopping weekend. In fact, there was a 6.4% increase in foot traffic against Black Friday 2023, the report noted, as measured by traffic counters at various Simon properties.
There were more shoppers turning out for Black Friday specifically, which is a bit of a change from previous years, as traffic was up 5.9% that day alone. But shoppers kept the ball rolling into the weekend, with a 6.3% bump on Saturday and a surprising 8.2% surge on Sunday. And amazingly, this happened in an environment where overall Black Friday traffic dropped 3.2% against 2023’s figures.
Is Simon Property a Good Stock to Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SPG stock based on three Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 33.51% rally in its share price over the past year, the average SPG price target of $173.46 per share implies 2.77% downside risk.
