Could Retail Closures Actually Be Good for Your Community?
by Lacy Beasley, published on Trustbelt.com, February 2018 [link]
Is retail dead or simply evolving? With a record number of store closings in 2017, what can we expect in 2018 and how will it impact our communities?
Is Retail Healthy or Dying?
Christmas spending was the highest in at least twelve years this holiday season with shoppers spending more than $900 on average. When people feel optimistic about the economy, they loosen their wallets and splurge on replacing items and buying for others. Through 2017, consumer confidence eclipsed its highest point in seventeen years. The average American is optimistic about the economy and feels that tax reform will have a positive impact on the country. In December 2017, the unemployment rate remained at a low 4.1 percent for the third consecutive month. Retail same store sales year over year are estimated to be up 4 percent over the previous year. Christmas spending in 2017 exceeded expectations by being up 5.5 percent from 2016.
Despite 2017’s remarkable difference in economic indicators from the Great Recession, more chain stores closed in 2017 than in 2008. In 2017 approximately 7,795 U.S. retail chain store closures were announced, exceeding the 6,163 closures during the Great Recession in 2008. For comparison, in December of 2008, unemployment was at 7.2 percent, the consumer confidence index had hit an all-time low and retail same store sales were down 9 percent. With all signs currently pointing to an improved economy, why so many closures in 2017? What are the factors contributing to the changing retail landscape driving store closures?
With all signs currently pointing to an improved economy, why so many closures in 2017? What are the factors contributing to the changing retail landscape driving store closures?
According to the IHL report ‘Debunking the Retail Apocalypse,’ “When it comes to chains shuttering stores, only 16 chains account for 48.5 percent of total number of stores closing. Five of these chains (Radio Shack, Payless Shoes, Rue21, Ascena Retail and Sears Holdings) represent 28.1 percent of the total stores closing.”
… continue for insights into how retail closures are beneficial.