Many know that we have had a healthy economy recently and people have been spending their dollars consistently. However, 2019 proved to be a difficult year for retailers, regardless of the strong economic state. Retailers in the US reported 9,302 store closings. This is a 59% jump from 2018. Not only this, but this is the highest number since Coresight Research began tracking the data in 2012. With more than 9,300 stores closing in 2019, this is not a good sign for retailers future.
For example, well-known stores such as Payless, Gymboree, Charlotte Russe and Shopko all filed for bankruptcy and closed in year. Between all of these brands, a combined 3,720 stores shut their doors according to Coresight. Payless was a major contender for this, being that this was their second filing for bankruptcy in February and shuttered 2,100 US stores. Not shocking enough to see such big name brands shutting down their doors? More stores that we know and love are cutting down their store footprint as well. Stores including Ann Taylor parent, Ascena Retail (ASNA), Family Dollar, GNC (GNC), Walgreens (WBA), Signet Jewelers (SIG), Victoria’s Secret, and JCPenney (JCP). Even retail giant Forever 21 will be closing up to 178 stores, although they have not yet been finalized. The closing is not expected to stop there either. With the presence of online shopping being so prevalent within the market, retailers will continue to struggle. High debt levels and rent will tear apart traditional brick and mortar retailers and close them down by the thousands. According to CNN, this could force up to 75,000 mores stores to close by 2026. This includes more than 20,000 clothing stores and about 10,000 consumer electronics stores, UBS estimates.
Retailers that are considered thriving giants in the industry are even struggling and quietly shutting their doors. Such stores include Walmart, BestBuy, Nordstrom, and Kohl’s. Monster department store Macy’s reported this passed Monday the worst stock on the S&P 500 this year, losing 49%. However, it is not all doom and gloom in the future for brick and mortar retailers. According to real estate firm CBRE analysts: “Malls are benefiting from the refreshing influence of Generation Zers, who prefer to shop in stores and are driving traffic back to brick-and-mortar retail,” said in a research report. Therefore, retail stores are not yet dead. In fact, online brands will open stores. According to CNN, food and beverage concepts are growing, gyms and fitness concepts are spreading. Pop-up and concept stores will also continue to be a popular tool for many retailers.
A continuously healthy economy and spenders will keep retailers alive and aid in the addition of new stores as well. Strong spending power among consumers in stores will be able to keep the flow within retailers who need to keep their doors open in the new year and years to come.