Authored by Michael Snyder via The Economic Collapse blog,
Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016?
Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far.
That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it. In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin. We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.
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Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers. And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.
Look, Amazon didn’t just show up to the party. They have been around for many, many years and while it is true that they are growing, they still only account for a very small sliver of the overall retail pie.
So those that would like to explain away this retail apocalypse need to come up with a better explanation.
As I noted in the headline, there are 20 different major retail chains that have closed at least 50 stores so far this year. The following numbers originally come from Fox Business…
1. Abercrombie & Fitch: 60 stores
2. Aerosoles: 88 stores
3. American Apparel: 110 stores
4. BCBG: 118 stores
5. Bebe: 168 stores
6. The Children’s Place: hundreds of stores to be closed by 2020
7. CVS: 70 stores
8. Guess: 60 stores
9. Gymboree: 350 stores
10. HHgregg: 220 stores
11. J.Crew: 50 stores
12. JC Penney: 138 stores
13. The Limited: 250 stores
14. Macy’s: 68 stores
15. Michael Kors: 125 stores
16. Payless: 800 stores
17. RadioShack: more than 1,000 stores
18. Rue21: up to 400 stores
19. Sears/Kmart: more than 300 stores
20. Wet Seal: 171 stores
If the U.S. economy was really doing well, then why are all of these major retailers closing down locations?
Of course the truth is that the economy is not doing well. The U.S. economy has not grown by at least 3 percent in a single year since the middle of the Bush administration, and it isn’t going to happen this year either. Overall, the U.S. economy has grown by an average of just 1.33 percent over the last 10 years, and meanwhile U.S. stock prices are up about 250 percent since the end of the last recession. The stock market has become completely and utterly disconnected from economic reality, and yet many Americans still believe that it is an accurate barometer for the health of the economy.
I used to do a Black Friday article every year, but I have ended that tradition. Yes, there were still a few scuffles this year, but at this point the much bigger story is how poorly the retailers are doing.
So far this year, more than 300 retailers have filed for bankruptcy, and we are currently on pace to lose over 147 million square feet of retail space by the end of 2017.
Those are absolutely catastrophic numbers.
And some analysts are already predicting that as many as 9,000 stores could be shut down in the United States in 2018.
Are we just going to keep blaming Amazon every time another retail chain goes belly up?
What we should really be focusing on is the fact that the “retail bubble” is starting to burst. In the aftermath of the last financial crisis, retailers went on an unprecedented debt binge, and now a lot of that debt is starting to go bad.
In fact, in a previous article I discussed the fact that “the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year”. This is going to have very serious implications on Wall Street, but very few people are really talking about this.
Most stores try to stay open through Christmas, but once the holiday season is over we will see another huge wave of store closings.
And as individual stores close down, this will put a lot of financial pressure on malls and shopping centers. Not too long ago, one report projected that up to 25 percent of all shopping malls in the entire nation could close down by 2022, but I tend to think that number is too optimistic.
The retail industry in the United States is dying, and the biggest reason for that is not Amazon.
Rather, the real reason why the retail industry is in so much trouble is because of the steady decline of the middle class. The gap between the ultra-wealthy and the rest of us is greater than ever, and we can clearly see the impact of this in the retail world.
Retailers that serve the very wealthy are generally doing well, and those that serve the other end of the food chain (such as dollar stores and Wal-Mart) are also doing okay.
But virtually all of the retailers that depend on middle class shoppers are really struggling, and this is going to continue for the foreseeable future.
Most American families are either living paycheck to paycheck or are close to that level, and these days U.S. consumers simply do not have much discretionary income to play around with. More hard working Americans are going to fall out of the middle class with each passing month, and that is extremely bad news for a retail industry that is literally falling apart right in front of our eyes.
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Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.
Admin has been sounding this horn for some time. He is a modern Nostradamus.
Not Nostadmus. He just knows how to count and tell the truth about it. Quinn is occasionally wrong but he don’t lie. The tax base is shrinking for suburban governments and school districts. That isn’t good.
Look around people. Count the empty retail spaces. It’s kind of scarey.
Are retail (including online) sales up or down? Maybe I missed that stat in the article.
Everything is pretty rosey around my parts. Langley VA.
Up, way up over the prior years.
Along with most all other economic indicators.
Retail chains are shrinking because their business model is no longer as competitive in the markets as it was prior to the dominance of the internet that make the big boxes compete with much lower cost operations that are cutting down their former competitive advantage (the same way the ma and pa shops lost out to the big box lower cost and wider range of retail market service advantage).
Not that the truth is very popular around here, or ever will be. This is a negativist site.
And so is consumer debt. As the article states (and has been covered here many times), most families are already living hand to mouth. When it comes time to repay this debt, folks are going to have to drastically reduce their spending or the problem will amplify with waves of bankruptcies (personal and commercial). Either way, the economy is going to take it in the nuts.
Also, Langley, VA isn’t a great barometer for the rest of the country. My little burg is doing pretty well, but 10 miles down the road isn’t so great.
Listening to the clueless Michael Smerconish of CNN and radio fame on the radio today. He was having a chat with another clueless talking head today.
Paraphrasing but, “Unemployment is at all time lows, the stock market is great, retailers cash registers are ringing, this strong recovery has been ongoing for over six years, at what point do we say this is no longer Obama’s economy and we give credit to Trump”
Michael and his guest no doubt get their information from other main stream media outlets…….
Oh, his guest said, according to recent polls, Trump is still below 40% approval rating, so……probably never.
And the beat goes on.
Let’em eat cake.
“As I noted in the headline, there are 20 different major retail chains that have closed at least 50 stores so far this year.”
Not sure what to think of the list of 20, since the only one that I have even entered in at least five years is CVS, and that just for minor purchases because I happened to be passing the store on my way home. Could have easily made the same purchase elsewhere without going more than ¼ mile out of my way. Just my personal observation as I have no interest in the other 19 whatsoever.
A few numbers for a different perspective on this “Retail Apocalypse”
There are roughly 3.6 million retailers in the United States employing 42 million people–
The closing of 6,163 stores amounts to a whopping .0017% of retailers closing their doors.
By contrast–Amazon has taken a much larger % of the retail sales i respect to closings and on Cyber Monday, reported orders of over 28 million items bought/shipped from 3rd party retailers…..
Conclusion–we are far from any “apocalypse” of retailers closing at 17 thousandth of a percent and yes, Amazon and its like CAN explain the majority of any brick and mortar sales declines. Most retailers operate on narrow margins now-a-days anyhow because of the cheapos like Walmart, Costco, Bob’s stores etc—take away 10 to 15% of their sales ( especially the bigger ticket electronics) and you get what we have now.
PS: It is also worth noting that total retail SALES have increased every year since 2010, it just seems that certain “brands” are dying off—carrying grandpa clothes at Sears, grandma clothes at Abercrombie, Macy’s and Pennys–and “radio” products at Radio Shack instead of the latest I-phones, DVR’s or Roku’s..
We have had several store closings on the small downtown strip in the smallish town where I live just in the past six months- a toy store, jewelry store, and an antique/junk store. I expect more to follow sadly.
The industries that paid high blue collar middle class wages are gone and so is the expendable income and the tax base that supported schools police fire water systems and local retailers and it ain’t coming back ! Any body that could do fifth grade math knew this was coming just like they knew it right after their job went to China and their pension when down the drain !
That goofball in Langley (CIA) Virginia is living in the tumor that is the DC (Dessicated Corpse) Metro Swamp. Like the “Rust Belt” of dead factories, this Retail Sector has just sank into the Swamp. What comes next? Paradigm Shift.
“Capitalism”, “Communism”, “Cult Marxism” or whatever the Merchants of Menace are called these days are SOOOO OVER. There is no next step. There is no “recovery”. At some point, you lose peoples’ trust and NEVER GET IT BACK.
There are no other places to run anymore. No more gullible and ignorant victims listening to fake poisecushun stories. Its the End of the Line. The End of THE ROAD, that has been long foretold HAS FINALLY HIT THE CREDIT LIMIT OF UNCLE SHAM AND FAKE FIAT CURRENCY COUNTERFEITING SCAMS.
The fault is not in Economics, but Genetics. Low brow brown and black are the Chapter 13 of Economics.
I *do* believe he was trolling…DC being an artificial economy and all…
Overstated, IMO.
Look at the list, and you’ll see TONS of “redundancy.”
A lot of what’s going on is simple market “weeding,” a healthy, natural part of the process.
But then, Snyder was never known for writing on the bright, chipper side of things.
Of course no one is concerned! Why, if someone sounded the alarm, the markets would react and we might lose some points on the Dow. And if this happened, the European and Asian markets would lose confidence and also begin to drop. Why, if that happened, the confidence in the dollar would begin to fall and there would be a calamity, calamity I tell you.
So, of course no one is concerned.
The consumer is tapped out.
Exactly nothing left to steal so now the Washington DC circle Jerk will rearrange the deck chairs for a better view of the ice berg dead ahead . We as a nation are going down and it will be by our own hand ! When looking for someone to blame we all need to look in the mirror . None of us took a baseball bat to the fucking knees or teeth to the Congress critters on both sides of the coin but it’s too late now . We needed to start busting some heads open in Congress 40 years ago . They do not fear us at all , in fact they resent us as we are forced to support their sorry asses and their GOD DAM families too ! Follow the money and the jobs Quid pro quo .
Slow-motion train wreck since 2008? And the bridge ’round the bend has collapsed from infrastructure neglect.
Lots of empty stores in my area. Strip malls that were built during The Financial Panic of 08 are still not full. Michael is right. The American middle class is disappearing and our political leaders just don’t care.