More retail stores have closed in 2017 than at the same point in 2008
(This post originally appeared on The Washington Post)
The bad news for the retail industry is coming fast and furious these days. Big names are shuttering stores or going out of business.
Add it all up and more than 2,880 retail stores have been closed this year to date, a pace that is running ahead of the same point during 2008’s recession, according to a recent Bloomberg report. What’s worse is that the future isn’t looking any brighter.
The “bubble has now burst,” Urban Outfitters Chief Executive Richard Hayne told analysts. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
One factor is, not surprisingly, Amazon. The online giant has taken away significant sales from malls and chain stores. (Amazon.com Chief Executive Jeffrey P. Bezos owns The Washington Post). “The Seattle-based company accounted for 53 percent of e-commerce sales growth last year, with the rest of the industry sharing the remaining 47 percent, according to EMarketer Inc.,” Bloomberg reports. But there’s another thing going on: too many stores have been built and that’s caused an overall glut in retail space. The U.S. has far more square footage devoted to retail per capita than any other country – six times the amount of our European and Japanese counterparts.
But take heart, small retailers. “Class A malls” are thriving and research shows that customers still prefer to shop in physical stores 75 percent of the time. Big retailers have more overhead and are slower to make significant changes than their smaller counterparts. Main Street merchants that offer a great customer service experience – both in their store, over mobile and online – have plenty of opportunities to thrive.
It’s all about refocusing on your customers, believes one retail analyst. “Management needs to be fixated on speed of delivery, speed of supply chain, and be able to test read and react to new and emerging trends,” he told Bloomberg.