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04/12/2021

Amazon is Taking Over Empty Malls for Distribution Needs

Amazon has become a dominant force during the Covid-19 pandemic, and it has already taken over 25 unused malls over the last few years to fulfill its distribution needs.
Amazon warehouse

Amazon has become a dominant force during the Covid-19 pandemic, and it has already taken over 25 unused malls over the last few years to fulfill its distribution needs, according to recent reporting by NBC News

While the bulk of Amazon’s transformations of these spaces happened between 2016 and 2019, NBC reported, the company has ramped up its efforts with a mall shopping spree during last four months. 

Executive Summary

While Amazon has made headlines for how quickly it is expanding its massive fulfillment footprint, it’s not the only retailer looking for space. NBC’s report comes as warehouse demand is at an all-time high, with retailers scrambling to fulfill online orders and keep up with online shopping activity during the Covid-19 pandemic. In fact, the demand is so high that retailers are converting empty malls, office buildings and even golf courses to make way for more fulfillment and distribution centers. 

At the same time, mall vacancies are continuing to climb in 2021, following an abrupt drop off of in-store shopping in 2020. While some of the pandemic-related trends to online shopping trends are expected to slow as the national Covid-19 vaccination program rolls out, retailers are anticipating continued growth in omnichannel shopping.

Amazon recently won approval to turn a Baton Rouge mall into a 3.4 million-square-foot distribution center, as well as a 220,000-square-foot center in Knoxville, Tennessee. In late 2019, Amazon was approved to turn a mall in Worcester, Massachusetts, into a 121,000-square-foot distribution center.

The company’s appetite for unused malls is so large it was reportedly in talks with the nation’s largest mall owner, Simon Property Group, to take over former J.C. Penny and Sears stores. 

Amazon is “constantly exploring new locations and weighing a variety of factors when deciding where to develop future sites to best serve customers,” a spokesperson told NBC News.