Retail is at a tipping point. Don’t be deceived by “fake news” that retail is thriving. Rather, it is undergoing massive restructuring and many retailers and brands are being swept under by the changes.
While it’s true that retail sales grew 2.9% during the first half of 2019 — 3.5% including motor vehicles and gas stations — following a dynamic 4.7% year-over-year increase in 2018, a record number of retail stores are closing this year.
Through the first 28 weeks of the year, U.S. store closures have exceeded all closings in 2018. To date, 7,062 stores have closed, against 3,017 openings, as compared with 5,864 closures in 2018 and 3,243 openings.
And those store-closing numbers only include big retailers, not small independents, like you.
Further, Coresight Research predicts that the number of closings could exceed 12,000 stores shuttered by the end of the year.
Against this background, there are four undisputed macro-economic factors that are creating havoc in retail:
- Too many stores: America remains grossly overstored as compared to the rest of the world, 22.1 square feet per capita versus 14 square feet in Canada, 11.1 in Australia and 4.6 in the U.K. The economy simply can not sustain this volume.
- Internet disruption: Amazon and ecommerce in general continues to have huge disruptive effects on brick-and-mortar retail. With each 1% rise in online penetration, UBS predicts, some 8,000 to 8,500 stores will be forced to close, totaling some 75,000 stores by 2026 at the current pace of ecommerce growth.
- Fewer shoppers interested in what you sell: Demographic shifts mean fewer shoppers interested in shopping. The number of Americans over 65 will grow 38% from 2015 to 2025, as compared with only 10% among those 24-to-44 years. Consumer spending drops sharply after age 65 for many consumer goods categories.
- Smaller families mean less spending: And while those aged 24-to-44 years are at an acquisitive life stage, they are also having the fewest number of children in American history. Growing families translates into more household spending, but that isn’t happening now.
While there are no simple answers to these macro-economic trends, individual retailers and companies that sell through retailers can proactively insulate their businesses from them.
Retail Rescue Provides Solutions
Retail Rescue provides solutions to retailers and brands that sell through retail. We have the latest research about what works — and doesn’t — in retail. We understand the challenges of managing a multi-faceted retail business and can be a trusted adviser and confidant.
We have proven strategies and methodologies that help retailers and brands grow and be more profitable.
We can train your sales staff to close more sales. We can amplify your marketing, advertising and social media to attract new customers.
If you think we can help you build a more successful and profitable retail business — and we believe we can — then we invite you to tell us about your business, your struggles and challenges so that we can give you actionable ideas that will make a difference.
Click this link to share the challenges you face in retail, so that we can craft a Retail Rescue solution that addresses them.