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The World Socialist Web Site reports
US retail store closures for 2017 are on pace to exceed [those of] 2008, when more than 6,000 locations were shuttered. In the first three months of this year, 2,880 store closures were announced, compared to 1,153 in the same time period in 2008. If the current pace of retail bloodletting continues, total store closures could top 11,000 by the end of the year, an unprecedented number.
Along with mounting store closures, retailers eliminated 30,000 jobs in March, with a similar number cut in February, making it the worst two-month period for workers in the retail sector since 2008, when the economy was in the depths of the recession caused by the bursting of the housing bubble and stock market crash.
According to Retail Metrics, the combined same-store sales for retailers in the first quarter of this year is expected to rise only 0.3 percent, the worst quarter in four years. Current expectations are well below the 0.8 percent growth in retail sales which economists had predicted in February. Without positive sales growth posted by discount giant Walmart, the retail industry would have posted negative figures. The dismal first quarter of 2017 follows poor in-store holiday sales at the end of 2016.
Traditional retailers are being slammed by competition from Internet retailers, in particular Amazon. Even as many companies are increasingly turning to online sales in an attempt to shore up their poor in store sales Amazon continues to dominate, accounting for 53 percent of all online sales growth in 2016.
[...] While market analysts point to the competition from Amazon as a key factor in retailer bankruptcies and store closures, another factor is the underlying weakness of the American economy and years of wage stagnation for the working class. Wage growth has been flat since the Great Recession and monthly year-on-year increases have not exceeded three percent since early 2009. According to the Economic Policy Institute, average hourly wages are $3.22 behind where they would be if wages grew at 3.5 percent over the last decade.
Even as the stock market has boomed over the last nine years, thanks to an infusion of unlimited cash through quantitative easing and other measures, the real economy has not recovered from the recession. The economic growth rate has not exceeded three percent in a decade and was a meager 1.2 percent in the first quarter of this year. Nearly all of the jobs created since 2008 have been either part time or temporary.
[...] The last decade has seen a series of buyouts, mergers, and acquisitions by private equity firms as part of last ditch efforts by retailers to avoid bankruptcy [as well as] outright liquidation by corporate raiders squeezing every penny before liquidating or reselling them.
Are you passing more and more boarded-up shops on your outings? Has the effect of fewer and fewer consumers (fewer people employed locally) trickled down to your company yet?
(Score: 2) by Joe Desertrat on Sunday April 16 2017, @10:43PM (1 child)
Too many retail outlets cut back on what should have been their strengths.
Inventory, the biggest advantage a retail store should have is that someone can buy it now when they need it. But too many stores cut back on inventory so once you make a trip for that desperately needed item, well, you find out you need to order it anyway. Empty or scantily stocked shelves do not bring customers back. If someone desperate does buy something, chances are they settled for an inferior stopgap solution and chances are, they won't give that outlet a second chance. Why stop at the retail store when you can get what you want quick and delivered to your door from an online outlet?
Service, well retail has been blowing this for decades (no, not getting serviced that way, they would be thriving then). For far too long sales people that should be helping you get what you need and want have been pressuring customers into getting more product, only for the customers to find they still don't have what they needed or wanted once they exit the store. It's not necessarily the fault of the sales people, they need jobs and the only way to keep them and to get a decent paycheck is to follow these policies of management. That tends to sour the consumer experience. If you are a relatively passive person, and I suspect most people are, it is far more pleasant to browse well constructed websites than to be irritated by sales people who don't have your interests in mind, especially if that sales person has little knowledge about the products except for the pricier and newest that they are expected to push.
Both of these are tied into staffing, in which we have steadily seen the front line staffs reduced to low wage, unenthusiastic and uninformed drones. You can bet most of these stores that are failing have overwhelmingly reduced labor costs from the bottom up, rather than from the top down. The result shows in falling sales and closing stores.
(Score: 1) by nwf on Friday April 21 2017, @06:55PM
There may be some truth to that. When shopping for clothes, I have noticed a decided lack of stock in common sizes. And an item goes on sale, but they sell out in the first day. Even Target does this sort of crap. I now get more and more stuff online, especially via Amazon Prime.
Another is that these legacy retailers just don't understand what people want. People are much more about instant gratification and are more price conscious. You can use your phone and google to check prices at like 50 retailers in a few seconds. The ability to charge a lot more is vanishing.
Most of these stores have an online component, but it's typically poorly integrated. They are effectively separate companies. My wife was in sears visiting her mom and wanted to get her a TV. I found it online much cheaper (still sears) and they couldn't match it even on their own web site. I ordered it for in-store pickup and it was ready in 15 minutes. That sort of crap is just makes me never go back to sears.
On the other hand, many of the recent store closings appear to be specialty stores. Read high-priced boutique retailers and they suffer disproportionately when the economy slows. That and they are mostly pointless.