America’s Retailers Are Closing Stores Faster Than EverIssue 04-10-17 |
Traditional brick-and-mortar retailers continue to feel the pressure of changing trends in consumer shopping. Store closings continue for many types of retailers, from legacy department stores, such as Sears, Macy's and J.C. Penney, to more specific apparel retailers, such as Rue21 and Payless. Even more upscale retailers are not immune to this pressure, with Ralph Lauren closing its flagship Polo store on New York's Fifth Avenue.
Most of the pressure continues to come from e-commerce and e-retailing giant Amazon. Its sales growth accounted for 53 percent of the total retailing e-commerce growth in 2016. While consumers still shop, they aren't shopping as they once did—window shopping along city streets, or driving to a regional shopping mall.
The move to e-commerce leads to excess inventories, excess employees, and excess space for other retailers. In their attempts to generate profits, retailers may need to abandon the practices of the past: having an abundant selection of goods, with sales clerks, associates, and consultants available to provide service to customers. Store closings may have a dampening of ancillary shopping and of real estate values for shopping areas and malls.