A 'tsunami' of store closings expected to hit retail

[marmar]

Get ready for the next era in retail—one that will be characterized by far fewer shops and smaller stores.

On Tuesday, Sears said that it will shutter its flagship store in downtown Chicago in April. It's the latest of about 300 store closures in the U.S. that Sears has made since 2010. The news follows announcements earlier this month of multiple store closings from major department stores J.C. Penney and Macy's.

Experts said these headlines are only the tip of the iceberg for the industry, which is set to undergo a multiyear period of shuttering stores and trimming square footage.

......(snip)......

"I believe we're going to hear a lot more announcements in the coming months," Burden said. It's "an indication that there is a shift in the retail environment and it's one that will continue." ...................(more)

The complete piece is at: http://www.cnbc.com/id/101353168?__source=xfinity|mod&par=xfinity

[yeoman6987]

1. The growth is in Shopping Centers

I have seen the growth in retailers in those shopping centers which usually has a Verizon, pizza place, Chinese place, and a major retailer of some sort. I think the Mall is dying which mostly has JCPenny's, Macy's, and Sears among others. I believe that if you want to make it in retail today, you have to think convenience and in a "stipe mall" type of venue.

[wercal]

7. Weather dependent

In the muggy hot days of summer, people in the South like to shop at the 'Galleria'....and Minneapolis sports the 'Mall of the Americas' for people to stay warm in over the winter. Bouncing between strip malls on a really hot or really cold day can be pretty lousy.

I agree the mall is a dying breed, but it will take awhile for them to die out. And I think it will be more due to internet sales convenience (and pricing), than any convenience of going to a strip mall.

My town sports at least 3 abandoned strip malls, and at least one that has been converted and leased as office space. The strip malls really have to be positioned where the 'rooftops' are - meaning where people live....and usually where people with disposable income live. Once the housing stock in an area starts to age, and people move out, the strip mall closes its doors. The mall, on the other hand, still benefits from being a regional draw. People still 'go to the mall' just for recreation or eating, etc.

[Warpy]

8. Dunno, here in the desert the indoor mall is always crowded

but the open air mall across the street is not, especially in the afternoon in summer. Most of the blank storefronts here are in strip malls, not the indoor type.

[underpants]

9. "Anchor stores" they are called

That used to be the model but, as you say, people want convenience rather than going to the mall.

[leftyohiolib]

2. republican society. dont bring jobs plan to the floor for a vote, deny u.i. stagnate wages

no money = no demand = no need for stores

[B2G]

11. It's more about online shopping

than politics.

[Shandris]

3. It is, imo, a lot like the shift in product offerings on digital media.

Before, a store's success was based solely on how much stuff it could offer. The era of the 'big box' store, or whomever had the biggest collections and so on. Now, size is irrelevant because you can't possibly compete with an everything store like Amazon. The internet has made large retail completely obsolete. However, just like with digital media -- where pirating is every bit as effective as purchasing barring a personal conviction to spend money with the retailer -- the incentive to shop will be based on service and not on the amount of selection necessarily. Sizing apps based on customized user likenesses (a virtual dressing window) and a more social experience suitable for groups of people instead of just the solo shopper are a couple of ideas that could help the recovery in the physical retail sector.

But whether or not it is successful is going to be a very important question in many ways; someone has to make it work, or the tax base is going to continue to shrink to online stores. And while no one 'likes' to pay taxes, I think any of us on this site recognize the need for taxes and know that Congress needs to pick up making sure that net buys can't rob the tax base, even if we need to redo how we do taxes (a switch from state to regional could be an idea, for instance, but obviously one that would take some time to implement correctly).

[TeamPooka]

4. The deal with US companies used to go like this:

They needed Americans to make, sell and buy their products.
Now they make them in China and sell them on the internet so they just need you to buy their crap but they won't give you a job to do it anymore.

[theHandpuppet]

6. Yep. I think you nailed it.

And the only jobs being created are those that can be outsourced.

[Kablooie]

12. And they sell to the whole world so they don't need nearly as many Americans buying.

[TeamPooka]

17. yup

[xchrom]

5. du rec.

[Pretzel_Warrior]

10. online, baby! that is a main reason these stores are dying

I expect to see a lot of traditional retailers scale back the floor space and move a lot of their customers toward buying items online in the store for delivery to their homes. Only the stock items with very high GMROI will stay as physical goods to be purchased right in the store.

[moondust]

13. More lost jobs.

Not only retail and service jobs in those stores but...as long as there is plenty of vacant retail space available there wouldn't seem to be much need for contractors to design and build new space.

Where does it end?

[1000words]

14. Hurray for the growing "recovery!"

[Arugula Latte]

15. Just thinking out loud, but

I wonder how much of the retail job loss due to store closures will be offset by jobs added for warehouse work & delivery services (Fed Ex, etc.) if online shopping really is taking over.

[FarCenter]

16. Just determined that the laptop in store is old model - can buy the new one direct from manufacturer

Same price.