Israelis Opting for Open Shopping Centers Over Malls

The shopping centers are benefiting from a mix that includes many discount stores, analysts say.

Shoppers at Jerusalem's Malha Mall.
Olivier Fitoussi

Israelis are increasingly preferring open shopping centers and sales at the country’s malls are lagging, according to figures for last year.

Overall, sales per square meter increased 1.35% for the year, even though Israel’s population expanded 1.8% to 2%, so sales per capita shrank slightly.

The figures come from research company RIS. They include sales data from 2,600 chain stores. It’s likely that smaller stores did even worse.

Sales per square meter increased 3% in open shopping centers last year, while sales at malls increased only 0.8%.

“Israelis are shopping based on prices, and open shopping centers offer a mix that includes many discount stores,” said Tamir Ben Shahar of the consulting firm Czamanski Ben Shahar. Chain stores are also choosing open shopping centers, which generally have lower rents and management fees, he added.

RIS found that the number of stores decreased 9% last year, mostly because chain stores consolidated. This did not affect their sales.

Chain stores are not only consolidating, they’re also expanding at the expense of smaller independent stores, Ben Shahar said.

“With time, commercial centers are becoming more boring in terms of the mix of stores,” he said. “The big chains are holding a larger share of the space in commercial centers, and the smaller stores are disappearing. This trend will continue.”

Among Israel’s larger malls, the greatest increase in sales per square meter was at Petah Tikva’s Hakanyon Hagadol at 3.2%, Rishon Letzion’s Kanyon Hazahav Letzion at 2.6%, the Azrieli Group’s Malha Mall in Jerusalem at 2.3%, and the Azrieli Group’s Holon Mall at 2.2%.