Is major sales slump predicting demise of big-box retailers?

Retail sales hit major slump 02:21

SAN MATEO, Calif. -- This week's earnings reports from retailers confirm what empty parking spaces suggest -- sales are in a slump.

Kohl's said profits dropped 87 percent last quarter.

Macy's said its first quarter income was down 40 percent.

Mega stores like Walmart and Target are tryin... 02:24

In San Mateo, California, there is not much left of what once was a Sears. The Sears store being torn down here is just one of nearly 300 stores its parent company has closed over the last two years.

Sears' chairman said it's a victim of, "...disruptive changes from online competition..." and it's not the only one.

Sports Authority plans to close 140 stores this year, Macy's will shutter 36 locations, and JC Penney closed 47 over the last year.

Ira Kalb is a marketing professor at the University of Southern California. He said many big-box retailers no longer give shoppers a reason to leave their computers.

"Retailers have lost their added value," he said.

Since more online sales means fewer purchases at local malls, many retail developers are now trying to upgrade to more luxurious shopping centers that can sell twice as much per square foot, and offer much more than shopping.

"In order to compete with the online convenience and one stop shopping you have to create a store experience," said Kalb. "And the ones who have are doing well."

Like the Grove in Los Angeles, which is experiencing double-digit growth. It's a shopping center that looks more like a village main street. Complete with a green space, restaurants, and valet parking. The goal is no longer just shopping.

The Grove in Los Angeles. CBS News

"We are also in the entertainment business," said marketing director Judy Johnson. "We provide a unique experience where people want to come they want to stay and walk around and lie on the grass in the park."

Johnson said shoppers spend twice as much time, and more money, at the Grove than other malls.

"Whether they shop with us isn't really relevant because at some point everyone has shopping or dining needs and they will come back here because we have built a great relationship," she said.

When that San Mateo mall finishes tearing down its Sears store, it will replace it with a landscaped plaza and luxury bowling alley.