The retail apocalypse is on full display for everyone to see, and a new report puts the final nail in the brick-and-mortar coffin.
It is projected that up to 10,000 retail stores will shut down across the United States, according to Bloomberg News. This is about double the amount of last year, and could spike to 13,000 next year.
Moreover, it is forecast that 300 U.S. shopping malls will close within the next five years.
Dozens of bankruptcies, dozens of retail businesses on the verge of default and 150 million square footage being shut down. These are all signs that the retail real estate bubble has finally burst.
Just take a look at this chart from the Business Insider that visualizes the number of store closing this year:
Richard Hayne, Urban Outfitters CEO, outlined what’s the cause of this retail Armageddon.
“Let me begin with a fourth quarter overview. I would characterize results during this year’s fourth quarter, especially the holiday season, as both disappointing and highly unusual. Total company comparable sales were flat for the quarter, but within the quarter two distinct periods appeared. Comps were up nicely in the month of November. All three brands enjoyed a fantastic start to the holiday season by driving double-digit comp sales gains on both Black Friday and Cyber Monday. Things were looking very good,” he said in a March conference call.
“Then came December. Store traffic and overall demand in North America at all three brands evaporated for several weeks at the beginning of December. More normal demand returned only as Christmas and Hanukkah drew near. Demand remained normal immediately after the holidays, but fell back again once the New Year began. I can’t recall having ever seen a quarter with such wild and wide fluctuations.”
Here is one interesting statistic: Amazon’s market capitalization is nearly 10 times the value of the entire U.S. department store index.
“The retail apocalypse is on full display for everyone to see, and a new report puts the final nail in the brick-and-mortar coffin.”
Fake News???
How many thousands of stores did not and are not closing in 2017? How many new stores are opening?
Retail is going through an adjustment, too many stores opened or outdated product lines (Radio Shack) this happens all the time it is the nature of the beast we call capitalism.
I am 61 and never shopped in a mall, I know the prices are higher because of the rents that the mall owners charge.
The mall owners gravy train may be coming to an end, they have had it too good for too long.
Consumer choice in retail shopping is better than it has even been, if you cannot find the price you like at B and M try on line. I see special deals on stuff all the time at the on line site of many B and M operations, that are not offered in store. Just remember it is all just retail sales and at any given time you can find a better price at another store.