business news in context, analysis with attitude

The Washington Post quotes from a new report from investment firm UBS predicting that “an estimated 75,000 stores that sell clothing, electronics and furniture will close by 2026, when online shopping is expected to make up 25 percent of retail sales.”

The Post goes on: “Already this year, retailers have announced plans to close thousands of stores as they keep up with changing consumer habits. Payless ShoeSource, which filed for Chapter 11 bankruptcy protection in February, is closing all 2,100 of its U.S. stores, while Gymboree is shuttering its 800 locations. Sears, which has closed 1,300 Kmart and Sears stores since 2013, is scrapping an additional 80 locations. A number of other retailers, including Gap, have hinted that store closures are on the horizon … Overall, retailers have closed more than 15,000 stores since 2017, according to UBS. Among them: Radio Shack (which closed 1,470 stores), Toys R Us (735 stores), and Mattress Firm and GNC (700 stores each).”
KC's View:
This all is complicated, and not exactly a straight line … even as these closures take place, we know that some online-only brands - ranging from Amazon to Wayfair - actually are investing, to various degrees, in bricks-and-mortar locations.

I know that this study doesn’t specifically refer to food stores … but if I were in that category, I wouldn’t get complacent.

A couple of observations, if I may.

First, this all takes place in a consumer environment where, in most retail categories, the landscape is way, way over-stored. So some of this is necessary erosion.

Second, it doesn’t mean that bricks-and-mortar stores are dead - just the ones that don’t have a story, don’t offer an experience, and don’t focus on a differential advantage. And, to be clear, if these stores perish, it is suicide, not homicide.