This Week's Forecasts & Trends E-Letter
Big Retailers Closing Stores At Record Pace In 2017 - Why?
April 18, 2017
Big Box retailers and many other popular chain stores – including Sears, JC Penney, Macy’s, Payless, Sports Authority, American Eagle, Radio Shack and many others – are closing their stores at a record pace so far this year.
From rural strip-centers to big city shopping malls, it has been a disastrous last two years for retail. There have been nine major retail bankruptcies so far in 2017 -- as many as all of 2016. You may have heard about this already, but I’ll offer a different take on this enormous problem today.
Without giving too much away too early, we have way too many shopping malls in the United States, far more than in any other country on a per-capita basis. We are going to see many malls disappear in the next 5-10 years as their anchor tenants go out of business or close stores.
Why is this happening? It’s a combination of things, of course, but the main reason is that Americans are buying more and more goods and services online than ever before. This trend is still in its infancy and will continue to hurt “brick-and-mortar” retailers for decades to come.
The question is, will the death of retailers cause a new recession? I’ll argue below that it indeed could. But I’m getting ahead of myself. Let’s begin by examining how this problem developed, how it is likely to play out in the next several years and what are the long-term effects on the US economy and our pocketbooks.
Speaking of our pocketbooks, you may want to seriously consider spending any gift cards you may have with major retailers sooner rather than later, given the spike in bankruptcies this year. There is a list of store closings by area in SPECIAL ARTICLES below – take a look.