WAUSAU, Wis.—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 isn’t one vacancy in Wausau’s downtown shopping district.

But...