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Even With 17 New Enterprises Expected and a Record of 640 Shopping Malls, Brazil Is Experiencing the Silent Collapse of Physical Retail, Driven by Debt, High Interest Rates, and Expanding Digital Consumption
For decades, ribbon-cutting ceremonies, smiles from shopkeepers, and photos of mayors at inaugurations symbolized prosperity. But this traditional scene of Brazilian retail has been hiding a concerning reality: the country celebrates openings while the sector lives its own wake.
Brazil now has over 640 malls in 249 municipalities — the highest number in history — but behind the appearance of growth lies a survival race.
In 2024, nine new shopping centers were opened, and 2025 promises another 17, according to the Abrasce census. However, the expansion is illusory.
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Since 2019, 26 million visitors have vanished from the hallways, reducing the monthly foot traffic from 502 million to 476 million. The Brazilian mall, which once symbolized leisure and collective consumption, tries to hide its shrinkage beneath the concrete of new constructions.
The Portrait of a Declining Sector
The numbers show a market that pretends to be vibrant. With 18 million square meters of gross leasable area and an average occupancy of 95%, the sector still boasts good apparent indicators.
Abrasce predicts a 1.6% growth in revenue in 2025, which, in practice, does not even cover the estimated inflation of 3.5% by the Central Bank. In other words: the volume of sales is only increasing on paper, while consumers’ purchasing power is declining.
The Consumer Confidence Index from FGV closed September 2025 at 87.5 points — one of the lowest levels since the pandemic.
The current situation sub-index fell to 82 points, reflecting the deterioration in family finances. According to IBGE, the real average income of workers grew by only 0.4% in 2024, while the cost of living increased almost twice that amount.
The National Confederation of Trade revealed that six out of ten families ended the year with debts exceeding 30% of their monthly income.
Credit card interest rates exceeded 400% per year, suffocating consumption outside of the wealthiest classes. And it is precisely among them that malls still breathe: sales among classes A and B grew by 9.9% and 9.4% respectively, showing a sector sustained by a few — while the majority watches from the windows.
The Disguise of Shine
To disguise the crisis, shopping malls invest in appearance. About 31% already have food boulevards, and 26% have created loyalty programs. But the problem is structural.
The malls depend on so-called anchor stores — like C&A, Renner, and Centauro — that attract consumer traffic. These stores pay lower rents, serving as bait for smaller, called satellite stores, which ensure real profit. When an anchor store closes, the corridor empties, foot traffic vanishes, and the mall implodes.
In the United States, this same model collapsed between 2017 and 2020, with the closure of more than 12,000 department stores, such as Gap and Forever 21. According to Credit Suisse, one quarter of American malls were doomed before 2022.
Brazil is now repeating the script. Among the large national fashion chains, average profit fell by 9% in 2024, yet new enterprises continue to be built.
The Change of Desire
The digital revolution has transformed consumer behavior. If Saturdays were once reserved for a stroll at the mall, today, it’s merely plan C. E-commerce has hijacked the desire to buy. Amazon, for instance, already accounts for 37% of the American digital retail, according to Morgan Stanley data. In Brazil, e-commerce tripled between 2020 and 2024 — jumping from R$ 87 billion to R$ 262 billion, according to Nielsen.
By 2025, 73% of consumers prefer to shop online when shipping is free or fast, according to PwC. The mall lost the most important battle of modern times: the battle for people’s time. Digital platforms not only sell — they predict what the customer wants, deliver with convenience, and replace the physical outing with a click.
The Ghost of “Dead Malls”
The phenomenon of “dead malls” — shopping centers with less than 40% occupancy — is spreading across the world. In the United States, more than 300 malls were abandoned between 2017 and 2024, and today one in five is partially or completely vacant. Empty corridors, flickering signs, and stopped escalators have become the portrait of obsolescence in collective consumption.
In Brazil, the scenario is not yet terminal, but the shadow is already appearing. In states like São Paulo, Rio Grande do Sul, and Ceará, there are enterprises with less than half of their stores active, according to the Abrasce census. The symptoms are clear: reduced traffic, increasing defaults, and windows covered with brown paper. The mall, which once was the “third place” between home and work, has become a ghost space of concrete and glass.
Jurist and researcher Ronaldo Lemos summarizes the diagnosis: malls have lost the most valuable competition of the 20th century — the competition for time. “They failed to compete with e-commerce and are now becoming elegant ruins of the pre-digital era, when consumption was collective and time was slower,” he states.
The Metamorphosis of the Square Meter
The reconfiguration of the sector is already underway. To survive, malls are transforming into time rental organisms. Clinics, gyms, and coworking spaces are occupying the space that once belonged to storefronts. According to consultancy Cushman & Wakefield, the number of medical clinics in malls grew by 42% between 2020 and 2024. The services and convenience sector now accounts for 10.4% of the stores — surpassing fashion retail in various regional markets.
Chains like Smart Fit, Dr. Consulta, and WeWork have become new “anchors” in this transition era. Each empty store turns into a new utility: school, office, coworking space, or restaurant. The mall stops selling products to sell time, convenience, and necessity.
The Financialization of Collapse
While the sector reinvents itself, the financial market turns crisis into profit. In 2025, shopping mall real estate funds rose by 18.4%, surpassing the average index of funds in the sector, according to data from B3. Managers like XP Malls, Riza, and Pátria Investimentos see opportunity where retail sees despair.
XP Malls sold nine enterprises for R$ 1.6 billion, reducing debts and transferring risks. Riza expanded its portfolio, profiting from rent renegotiations, and Pátria invested R$ 2.5 billion in devalued assets. It’s the new retail game: transform bankruptcy into opportunity.
The average vacancy rate of shopping malls fell to 4.8% in June 2025, but not because the public returned — but because space became too expensive for small retailers. The elite mall survives; the popular one withers. JHSF, owner of Cidade Jardim, saw a 17% increase in the second quarter, driven by a nearly 27% jump in sales of the very enterprise. Luxury has become the last refuge of confidence: Rolex, Dior, and Prada have replaced C&A and Riachuelo as the new anchors of consumption.
The New Role of the Mall
Today, six out of ten Brazilians go to the mall not to shop, but to dine, get a haircut, or handle bureaucratic tasks. The temple of consumption has turned into a convenience square. Parking lots have become food hubs; at Shopping Tijuca in Rio, the space of the former Forever 21 has been occupied by restaurants and a VIP lounge, increasing rent by 80%.
The address is the same, but the purpose has changed. The malls that understood this are swapping luxury for functionality, desire for utility. Those who insist on solely relying on rent, ignoring the new times, will become fossils of the era of collective consumption.
From Ruin to Renewal
Every crisis carries the seed of reinvention. Brazilian malls are changing their skin, albeit at the cost of pain and restructuring. Survival depends on recognizing that the true asset has never been space, but rather the flow — of people, ideas, and value. Consumption changes, the scenario changes, the customer changes. But the rule remains the same: those who anticipate change lead. Those who ignore it vanish.
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