The retail apocalypse is creating a 'rolling crisis' that is rippling through the US economy
Retailers are closing thousands of stores and going bankrupt at a rate not seen since the recession, and tens of thousands of people are losing their jobs as a result.
The effects of these job losses will hit local economies hard, according to Mark Cohen, the director of retail studies at Columbia Business School.
"This is creating a slow-rolling crisis," Cohen told Business Insider. "The people that work in retail stores will lose their jobs, then spend less money in retail stores because they are no longer employed. That creates a a cascade of economic challenges."
Since October, 89,000 workers in general merchandise stores have lost their jobs, which is more than the number of people employed in the entire US coal industry, reports The New York Times .
During his campaign for the White House, President Trump used coal miners as an example of workers who never recovered from the recession, as the Times pointed out.
Like coal miners, retail workers don't typically have a set of skills that's easily transferable to another industry, according to Cohen.
The retail industry, which employs one out of every 10 American workers, typically pays low wages but provides employment to people in every age bracket, including those who are low-skilled and need flexible scheduling options.
So when these workers lose their jobs, they can have a hard time finding other employment.
"The coal miners are out of luck," Cohen sad. "Retail workers are in the same boat."
The growing popularity of ecommerce is one reason why retailers are closing so many stores.
But the ecommerce industry won't come to the rescue of out-of-work retail employees.
Most warehouses are regional and typically located far from residential areas, which means they aren't within a reasonable commutable distance to displaced workers. By contrast, retail stores are typically located close to residential communities.
Ecommerce warehouses also employ people on a much more limited scale than retail stores, since they are becoming increasingly automated, Cohen said.
Unfortunately for retail workers, this crisis doesn't appear to be dissipating any time soon.
"Brick-and-mortar closings will continue to expand throughout the year," Cohen said. "There is no reason why they would abate."
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The retail industry, which employs one out of every 10 American workers.
I'm sure Trump has a plan
Yeah, he'll "demand" that the stores stay open or he'll fire Cruise missiles into the dumpsters near the parking lots of their corporate headquarters. After warning them to move their cars and people first of course. They won't do any damage to the pavement and the employees at the headquarters will be using the parking lots within a few hours, but he'll look "strong!" His base will have a collective orgasm.
Who knew the retail industry could be so complicated?
You guys crack me up. Blame this on Trump instead of eCommerce and the $15.00/hr minimum wage you are all for. That is down right pitiful and ignorant....but not unexpected.
Who "blamed" Trump? You just can't even help yourself anymore. If a liberal speaks, you're right there to respond with a knee-jerk nonsense allegation.
I didn't blame anything on Trump, 96.
But let me add this, you have no problem with all the shit articles posted blaming Obama/Clinton/liberals/democrats for everything from the weather to WWII.
Time for you to get your head out of the sand or quit pretending your a moderate.
Phonies crack me up.
It's going to a wave of unemployed across the country.
Bebe just announced it is going to close all of it's stores.
What a shame!
Terribly sorry to see this happening. We're losing all kinds of anchor stores here in Louisville. I also wish that CVS would stop calling me about a prescription that is ready for a Richard Neugent...
Dowser, a lot of towns/cities will be losing anchor stores. That is causing a huge problem with the malls themselves since there is no one to fill those empty spots.
Can't help you with CVS though.
I've noticed here that a lot of the anchor stores leaving are on the high end, price-wise. While there is a definite need for higher-priced/higher quality stores, there is also a huge need for mid-and lower priced stores. Those that are doing the best, from the charts below, seem to me to be some of the mid-lower priced stores. People just don't have the disposable income they used to have!
All of these stores have been going downhill for years, but there are others that are headed the other way.
Take JC Penny for example....
And Radio Shack has had the worst marketing strategy their company could have ever had. In the old days, people went to Radio Shack to get things they couldn't find in any of the other stores for electronic repairs, but now they are a phone store. I talked with a manager the other day and I agreed with her this was their biggest mistake. She was the one who told me that, but I already knew it. Nothing but a phone store now.
Half those companies above, I've never even heard of.
Although the internet has really had an impact on retailers, for some it has been beneficial and still other retailers are expanding. It's easy to get caught up in the New York Slimes doom and gloom when a Republican is in office. We are use to years of this happening. They live in their useful idiots heads like a brain virus.
Costco above is another one of these retailers. They may be a membership business, but people who work at Penney's can get a job at places like this and probably be a whole lot better off in the process.
Take Walmart for example below...
Oh what the heck.....
These 8 Retailers Are Actually Opening Stores
While the news is full of stories of chains going bankrupt or downsizing, these brands are still adding new locations.
Target is adding more small-format city locations. Image source: Target.
While the past year has been brutal for many retailers, with numerous chains either closing stores or shutting down entirely, there are some companies bucking that trend.
These are retailers that have seized the opportunities created by a down market. Not every company on this list has managed to completely solve the problems created by the consumer migration to the internet, but most have managed to find a balance.
For many of these chains, the misfortune of others has created opportunity. Some are thriving while others find their way in the rapidly changing marketplace. However you look at it, these companies are adding stores and growing at one of the most challenging times ever for retail.
Dollar General is continuing its rapid expansion pace. Image source: Dollar General.
Dollar General
Discount stores have generally bucked the current retail trend, and Dollar General ( NYSE:DG ) has been one of the leaders in that space. The company plans to open 1,000 new stores in 2017 -- that will come on top of the 900 locations the company added last year.
Costco opens new locations every year. Image source: Costco.
Costco
Costco ( NASDAQ:COST ) exemplifies the idea that slow and steady wins the race. The chain has plodded along in its usual fashion year after year seemingly unfazed by industry headwinds and competitive jostling.
In 2016, the wholesale retailer opened 29 new warehouses with 21 of them in the U.S. That followed 23 new stores globally in 2015, and this year, the company will continue with plans to add 31 new stores (17 of them in the U.S).
Wal-Mart has plans to expand in the U.S. in 2017. Image source: Wal-Mart.
Wal-Mart
Last year, Wal-Mart ( NYSE:WMT ) closed 269 locations, but it still saw net additions to its network. Over 100 of those closures stemmed from the shuttering of its small-format Express locations, which management originally hoped would be a source of future growth.
Going forward, Wal-Mart plans to open 59 new locations in the U.S. in 2017. That is in line with its normal expansion pace, and that growth will include new SuperCenters and more Sam's Club locations. To service those stores and a growing digital business, Wal-Mart will open new distribution centers as well.
Artist renderings of the new Target store design. Image source: Target.
Target
While Wal-Mart has abandoned its Express concept, Target ( NYSE:TGT ) is embracing the idea that going small can allow it to access markets and areas it otherwise would not be able to. The chain expects to operate over 100 small-format stores within the next few years, including one in New York City's Herald Square.
Furthermore, Target also plans to redesign 600 of its locations by 2018. Like the smaller stores, they will feature a modernized design highlighted by "glazed, large glass windows at the front of store, stenciled concrete floors and unique lighting throughout," the company said in a press release . "Additionally, the new design offers two entrances, each with a specific guest need in mind."
One entrance will be for customers looking to shop the store. It will feature market-appropriate seasonal displays. The second location will serve grab-and-go customers looking for a quick snack or other fast-serve items as well as those picking up digital orders.
Nordstrom has been expanding its "Rack" off-price chain. Image source: Nordstrom.
Nordstrom
While many of its department store rivals have struggled mightily, Nordstrom ( NYSE:JWN ) has done surprisingly well. The chain exceeded its earnings forecast in 2016 despite full-year comparable-store growth falling 0.9%.
The company has been slowly growing its store footprint, adding five locations in Canada in the fourth quarter alone, along with 21 of its lower-priced (albeit still higher-end) Nordstrom Rack stores. In 2017, the company has planned one new full-line store as well as 15 new Rack locations.
Image source: Marshalls.
T.J. Maxx and Marshalls
Like many of the other persevering companies on this list, TJX Companies ( NYSE:TJX ) , which owns Marshalls and T.J. Maxx, has succeeded by discounting. Both chains, as well as sister brand HomeGoods, offer a wide, changing selection of lower-priced merchandise. This model helps drive customer traffic as shoppers visit the stores more often, not knowing what deals they might find each trip. It has clearly worked well with the company delivering 21 straight years of comparable-store sales increases.
In its past fiscal year, TJX Companies added nearly 200 stores globally. It plans to continue that growth in 2017 with the company having a long-term plan to add 1,800 more locations for a total of 5,600. And that only includes growth of existing chains in established markets. The company is launching a fourth concept in 2017, which the company will test in two locations.
Hobby Lobby has grown by serving hobbyists needs. Image source: Hobby Lobby.
Hobby Lobby
Hobby Lobby opened 56 new stores in 2016 with more coming this year. The chain, which bills itself as "the world's largest privately owned arts and crafts retailer," expects to open 60 new locations in 2017, all in the U.S. That would bring its total number of stores to over 750. Between 1,700 and 2,500 employees will be hired to staff the additional locations.
Dick's has seen a number of rivals go out of business. Image source: Dick's Sporting Goods.
Dick's Sporting Goods
Dick's Sporting Goods ( NYSE:DKS ) has been a rare success story in a market that has seen major competitors like Sports Authority go bankrupt, while remaining players struggle to stay afloat. Dick's has encountered its own challenges, but overall, it has managed to deliver growth in the face of increased online competition.
In 2017, the company, which operates the Golf Galaxy chain as well, expects to open 43 new Dick's and nine Golf Galaxy stores. In some cases, the new stores will be converted Sports Authority or Golfsmith locations that Dick's acquired.
Take a look at these....
Flip through the screens at the link above and you'll see dozens of retailers that are profiting and expanding. You don't have to be stuck in the New York Slimes propaganda machine. You can think for yourself. Be an Individual, not one of the Collective!!!
What's your point Six. No one blamed the republicans or this administration. It's a fact that these chains are going under and that malls are struggling.
No one said that other retailers aren't doing well. Do you have a hard time understanding English.
''You don't have to be stuck in the New York Slimes propaganda machine. You can think for yourself. Be an Individual, not one of the Collective!!! ''
''It's easy to get caught up in the New York Slimes doom and gloom when a Republican is in office. We are use to years of this happening. They live in their useful idiots heads like a brain virus.''
That's your problem Six, the whole world revolves around politics for you and your sad need to try to make every article fit your view. Open your eyes for a change and you might actually be able to see the world is more than your simple version of it.
The problem is you can't think for yourself Six, you never have been able to. You just keep proving the point. Speaking of useful idiots.
The offer still stands Kavika. I can show you how to make a comment and have it fit neatly into the comment box.