Expert: “Tsunami” of Retail Store Closings Expected Across United States
Several leading business and financial experts say major and even regional retailers will be shutting record numbers of stores in 2014 and beyond.
Retail store and business experts predict by 2019, you will see over 30% fewer retail stores in malls and other areas. Michael Burden of Excess Space Retail Services told CNBC this week the shift to e-commerce, or online shopping, will increase the demand to have smaller, and fewer stores with less product stocked on the shelves.
Since 2008, experts say there's been a dramatic shift for larger retailers away from retailers call "brick-and-mortar" stores to online selling. The 2008 post-holiday season was called "The Fire Sale" because major retailers began a wave of layoffs and store closings across the country that have continued into 2014.
CNBC reports Sears will close it's flagship store in downtown Chicago in April. It's part of some 300 store closings by Sears since 2010. You may have read local news reports about the latest round, but it didn't (fortunately!) affect Columbia Center. JC Penney, Macy's and other retailers announced some cuts and store closings earlier this month, but again, we dodged them here in Tri-Cities. Target is going to cut 475 jobs, including some at it's Minnesota corporate headquarters, and does not plan to fill 700 empty positions.
For the 2013 holiday season alone, online shopping grew 10% over last year, and by the time data from traffic created by mobile devices (cellphones) is included, that number is expected to be 12%. Conversely, foot traffic in traditional retail stores declined by 15%, according to the consumer tracking service ShopperTrak.
According to CNBC:
"Stores are making a long-term bet on technology," said Belus Capital Advisors analyst Brian Sozzi. "It simply doesn't make strategic sense to enter a new 15-year lease as consumers are likely to continue curtailing physical visits to the mall."
Changes and new trends in consumer spending are inevitable. However, for many, it's hard to imagine that in 5-10 years the idea that a "trip to the mall" or other major retail center could be a thing of the past.
The slumping economy and financial issues the country is facing are not helping this trend, either.