Upscale malls reach out as shoppers cut back

High gasoline prices and nagging uncertainty about the economy haven't stopped her from prowling malls for fun, but she said they have pushed her away from her favorite department stores and boutiques to discounters such as Ross Dress for Less and Marshalls.

In recent months, consumers worried about the future have cut back on upscale binge shopping, according to analysts. That's driving down profits for many retailers and putting the squeeze on landlords that rent space to stores and restaurants.

Particularly hard hit are owners of shopping centers and buildings that house businesses serving new homeowners such as furniture stores and electronics warehouses. Also taking a hit are upscale department stores and other shops that have traditionally drawn the middle-income consumer.

Middle- and upper-middle-class shoppers, once a mainstay for upscale stores, now often shop below their means instead of above them -- choosing Wal-Mart over Nordstrom, perhaps, experts suggest.

Retail sales started dropping off about a year ago and the slide is still going, said Peter Lowy, head of U.S. operations for Westfield Group, the world's largest shopping center company and owner of 24 regional malls in California.

"We are operating as if this sort of environment will be around for another year or so," Lowy said. "Retailers are cutting back their growth."

Although Southern California mall owners say they are generally faring better than many of their counterparts in other parts of the country, they're feeling the pinch and looking for ways to lure shoppers back.

"If you are complacent you are going to get hurt in this economy," said mall owner Rick Caruso, who arranged free summer concerts and movies outdoors at his Grove and Americana at Brand shopping centers in Los Angeles County. The Wednesday night programs have produced sales spikes, he said.

"We're spending more on marketing, programming and events," Caruso said. "During times that are challenging you ramp it up."

Times are definitely challenging for many stores and malls, according to the International Council of Shopping Centers.