Retail apocalypse

Retail apocalypse
A modern empty former retail space located in the Southern Park Mall, Boardman Township, Ohio, United States
Date2010 (2010) – present
VenueMalls, Physical retail
LocationWorldwide; initially began in the English-speaking world, Western Europe and Japan
Cause
Outcome
  • Numerous bankruptcies ensued from early 2010s
  • Major decline in revenue from suppliers
  • Bankruptcies accelerated from March 2020 as a result of the COVID-19 recession and Inflation

Retail apocalypse refers to the closing of numerous brick-and-mortar retail stores, especially those of large chains, beginning around 2010[2][3] and accelerating due to the mandatory closures during the COVID-19 pandemic.

In 2017 alone, more than 12,000 physical stores closed. The reasons included debt and bankruptcy in the face of rising costs, leveraged buyouts, low quarterly profits outside holiday binge spending, delayed effects of the Great Recession,[3] and changes in spending habits. American consumers have shifted their purchasing habits due to various factors, including experience spending versus material goods and homes, casual fashion in relaxed dress codes, as well as the rise of e-commerce[4] and particularly juggernaut companies such as Amazon.com and Walmart. A 2017 Business Insider report dubbed this phenomenon the "Amazon effect" and calculated that Amazon.com was generating more than half of retail-sales growth.[5]

Not everyone agrees that a "retail apocalypse" exists. Dissenting economists and experts asserted that recent retail closures are a market correction, suggesting that the phrase is misleading and instills insecurity in the 16 million U.S. retail workers.[6] Research published by global retail analyst IHL Group in 2019 suggests that the so-called retail apocalypse narrative was an exaggeration, with "more chains that are expanding their number of stores than closing stores.”[7] That year, retailers in the United States announced 9,302 store closings, a 59% jump from 2018, and the highest number since tracking the data began in 2012.[8]

Corporate bankruptcies and store closings increased in 2020. During the COVID-19 pandemic, most retail stores, especially struggling mall-based retailers, closed for extended periods of time.[9] Several large retail companies filed for bankruptcy during the pandemic, including J. Crew, Century 21, Neiman Marcus, Lord & Taylor, Stage Stores, Stein Mart, JCPenney, Tuesday Morning, and Pier 1 Imports.[10]

The most productive retailers in North America during the retail apocalypse are discount superstores[11] Walmart and Target, low-cost "fast-fashion" brands (Zara, H&M), dollar stores (Dollar General, Dollar Tree, Family Dollar),[12] and warehouse clubs (Costco, Sam's Club, and BJ's Wholesale Club).[13]

  1. ^ Hartmans, Avery (15 December 2022). "The retail apocalypse isn't over: it's coming back to bite department stores, experts warn". Business Insider. Archived from the original on 27 June 2023. Retrieved 27 June 2023.
  2. ^ Peterson, Hayley (1 January 2018). "A tsunami of store closings is about to hit the US — and it's expected to eclipse the retail carnage of 2017". businessinsider.com. Archived from the original on 1 January 2018. Retrieved 4 January 2018.
  3. ^ a b Thompson, Derek (10 April 2017). "What in the World Is Causing the Retail Meltdown of 2017?". The Atlantic. Archived from the original on 10 April 2017. Retrieved 10 April 2017.
  4. ^ "These haunting photos of the retail apocalypse reveal a new normal in America". Business Insider. 24 March 2017. Archived from the original on 8 April 2017.
  5. ^ Taylor, Kate (1 November 2017). "One statistic shows how much Amazon could dominate the future of retail". Business Insider. Archived from the original on 15 January 2020. Retrieved 15 January 2020.
  6. ^ Cite error: The named reference Tech was invoked but never defined (see the help page).
  7. ^ Cite error: The named reference IHL was invoked but never defined (see the help page).
  8. ^ Valinsky, Jordan (8 January 2020). "Macy's is closing 28 stores and a Bloomingdale's store". CNN Business. Archived from the original on 8 January 2020. Retrieved 8 January 2020.
  9. ^ Peterson, Hayley (9 April 2020). "Coronavirus could trigger a second coming of the retail apocalypse, with a new wave of bankruptcies and store closings expected to sweep the nation". Business Insider. Archived from the original on 9 April 2020. Retrieved 8 May 2020.
  10. ^ D'Innoncenzio, Anne (27 May 2020). "Tuesday Morning faced 'severe consequences' from COVID-19". chicagotribune.com. Archived from the original on 28 May 2020. Retrieved 30 June 2020.
  11. ^ Edwards, Helen; Edwards, Dave (8 December 2017). "The US middle class is disappearing, which makes dollar stores very happy". Quartz. Archived from the original on 8 December 2017. Retrieved 8 December 2017.
  12. ^ Urie, Daniel (18 March 2019). "'Retail apocalypse' continues: Gap, Family Dollar, thousands of other stores will close this year". The Times-Picayune/The New Orleans Advocate. Retrieved 8 April 2024.
  13. ^ Jackson, Howard (29 March 2018). "Why Warehouse Clubs Aren't Facing an 'Apocalyptic' Decline". progressivegrocer.com. Archived from the original on 25 September 2024. Retrieved 8 April 2024.