By: Valerie Bauerlein at the Wall Street Journal
The mall is failing in the most middle-class city in America, and it isn’t because its 39,000 residents don’t shop.
Shoppers here spend about 30% more than state and national averages, according to the Census Bureau. Sales-tax receipts have grown 20% in the county since 2011, and city officials say there is not one vacancy in Wausau’s downtown shopping district.
But shoppers are spending relatively little at Wausau Center, the shopping center at the edge of downtown and the only enclosed mall for 70 miles. Sears closed last year there, and J.C. Penney left in 2014. So too have teen retailers PacSun and Aeropostale, Payless shoe store and even the Green Bay Packerland Plus superstore (though Packerland re-opened 10 miles away).
Mall owner CBL & Associates Properties Inc. walked away last year from the property, returning an $18 million loan and the keys to the lender.
Wausau shows how an economically thriving community might shop in a post-mall age. No longer are shoppers willing to drive distances to hit a clothing retailer. That is an online task. They are willing, however, to make an event of going downtown, to the compact shopping district where two-story brick buildings line the streets, to patronize Wassau’s local boutiques.
Click, Click, ClickGrowth in online spending, change from a year earlierSource: Slice Intelligence*Marathon, Lincoln, Taylor, Clark, Wood, Portage, Waupaca, Shawano, Langlade
The Pew Research Center has identified Wausau, a former timber hub roughly halfway between Minneapolis and Milwaukee, as the U.S. community with the highest percentage of middle-income households, defined as a three-person household with an annual income of about $42,000 to $125,000.
On 3rd Street, the bell chimed at The Local every few minutes one recent Saturday afternoon, signaling a customer coming in to check out Wisconsin-made Christmas wreaths, coasters cut from pine trees and candles in recycled beer bottles.
Owner Alison Magnuson, 26 years old, said shoppers her age want something they can’t find just anywhere. She got the idea to open a physical store with products handmade by more than 30 local artists after selling her own work on the online crafts marketplace Etsy Inc.
“People want that mom-and-pop store again,” she said. “It’s all coming full circle.”
The numbers back up Ms. Magnuson’s experience. Based on data from payments processor Square, Inc., sales at small-business sellers in Wausau that use its system rose 35% over the past year while the number of sellers remained constant. That shows “just how much these small businesses are thriving,” according to Square.
Mike Fondow said he can’t remember the last time he went to a mall. The 33-year-old computer-network specialist split this year’s Christmas shopping between online for an electric blanket and car floor mats, and locally owned shops for books and fermented black garlic. His favorite find was a sampler of Wisconsin-sourced teas for his mom, which he picked up at a farmers market.
“I like supporting the local businesses, and the downtown has more unique shops,” Mr. Fondow said.
Wausau has become a mecca for door and window manufacturers and workers’ compensation insurers. Incomes from its mix of blue-collar and white-collar jobs are slightly higher than the national average, and unemployment is lower.
Greg Maloney, retail CEO at real-estate firm Jones Lang LaSalle , which owns malls nationwide, said shoppers in the rural Midwest are changing their habits faster than others in the U.S.
“When you get into rural America, you’re looking at 35 to 40 minutes of driving” to get to the mall, Mr. Maloney said. Apart from a weekly stock-up trip to a membership store like Sam’s Club or Costco, he said shoppers in places like Wausau do as much shopping as possible online.
According to research firm Slice Intelligence, which analyzes email receipts, online sales in Wausau and surrounding towns are rising faster than elsewhere, up 50% in November from a year earlier, compared with 34% in Wisconsin and 25% nationally.
The Wausau Center mall is still open for business, and its current owner has added a fossil collection, a school-technology center and a children’s museum in formerly empty storefronts to help foot traffic. The mall has a remaining department store, Younkers, a unit of Bon-Ton Stores , Inc.
Retired accountant Russ Erickson recently opened a temporary shop there—Uff Da!,” a Norwegian slang word similar to “good grief.” He sells old postcards, replicas of Coca-Cola signs that he buys online and his hand-carved wooden signs—“RV there yet?” and “Didja bring da beer?”
“It’s got to be something that you can’t click on Amazon and get,” he said.
Mr. Erickson is encouraged by business so far and has hired two employees. But he said he hopes the mall can fill up with other uses, such as a business office or movie theater, to bring in enough people to sustain his shop.
He said he knows the clock is ticking, based on his family’s own shopping habits and the boxes on his doorstep. “My wife goes to Target, Wal-Mart, then eBay and Amazon,” he said. “She goes the way things are going.”
Three blocks from the mall, the century-old Janke’s book store was bustling on a recent Saturday. Inside, in the shadow of a 10-foot bear shot by a member of the Janke family, shoppers were buying children’s games, handmade cards and books by local authors.
Jane Janke Johnson has seen changes in retail since starting work at the family store 33 years ago. She remembers when Waldenbooks opened at the mall, then Barnes & Noble out near the interstate and then Amazon online in the mid-1990s. “I thought, they’re crazy, how will they be able to survive?”
The store has adjusted to changing consumer demand by offering more educational toys and locally made products, she said. Business is good for now, she said, but the recent acceleration in online spending scares her more than any other trend she has weathered.
“People will come in here and click, click, click, they’ll buy it in front of my eyes,” she said. “That hurts.”