There’s No End In Sight For The “Retail Apocalypse”

by | Sep 25, 2019 | Emergency Preparedness, Experts, Forecasting, Headline News | 22 comments

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    The massive wave of store closures and layoffs in the retail sector has gotten so bad this year, it’s been dubbed the “retail apocalypse.” But not only is it causing problems in the economy, Goldman Sachs thinks it is still likely to get much worse.

    “Our REITs team does not expect a near-term reversal of store closures from retail tenants, which should continue to result in eCommerce share gains, in our view,” says Goldman Sachs analyst Heath Terry in a new research note to clients on Tuesday, according to a report by Yahoo Finance.

    This information for investors was buried on page 10 of Terry’s report, however, several analysts feel that it should be a top concern because store closures are no longer doing the trick to shore up the retail space’s profitability as in years’ past. Instead, the argument could be made store closures are only pushing more people to shopping on desktop computers, tablets and mobile phones —which is usually a less profitable transaction for retailers due to free shipping costs and investments in building out digital capabilities.

    But the retail apocalypse cannot be blamed solely on the rise of digital shopping.  Companies are going bankrupt at breakneck speeds because they are unable to pay back the massive amount of debt they’ve taken on.

    There are already 11,000 store closures this year, exceeding the annual number of the past several years, according to Terry. CoreSight Research, which is cited by Terry, projects the retail store closure number to reach 12,000 by year-end.

    “We believe eCommerce growth will likely accelerate over the course of the second half as a record number of retail store closures, initiatives around fulfillment such as Amazon’s $800 million investment in same-day delivery and Etsy’s move to free shipping, and easing comps, drive more consumers to shift purchases online,” Terry writes.

    The other problem retail is facing is the lack of disposable income in most households in the United States.  With 25% of Americans putting necessities, such as food, on credit cards, there’s little left over for the luxury of “retail therapy.” Another glaring statistic is that 78% of Americans are living paycheck to paycheck as well and as the costs of goods and services continue to rise, the incomes of most households do not.

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      22 Comments

      1. Sam Adams

        This is all part of the cycle. They open they close and new ones take their place and things still go on.

        • Maybe

          Retail continues to take a hit.

          Full Layoff / Closing List: DailyJobCuts . com

        • John Sandhofner

          Agreed. eCommerce has it’s weaknesses and at some point this will become obvious. That will open the market for those who see what can be taken advantage of and open retail stores to service that nitch.

      2. The Deplorable Renegade

        Since I relocated I’m having to do more online shopping now which I generally don’t like. I still go to local sources all I can but that option is slowly diminishing. Ain’t gonna be nice.

        • rellik

          TDR,
          Welcome to my world! Most my shopping is done on line.
          I have a lot of older stuff and local shops just can’t handle parts and pieces, they just go-line and order them and then charge
          me double.
          I use USPS for a lot of shipping. FedEx and UPS are pricey, many times the cost of shipping is double the cost of the part.
          There is no rural mail delivery here so we have to go to the post office to get our mail and packages. Many places won’t ship to a PO box, but I figured out a work around. I use my physical address but add a second address line for the post office people to figure out my PO box so they can get it to me.
          Some places won’t ship to Hawaii, there are ways around that.
          my family will forward stuff to me.
          I use eBay, Amazon, RockAuto, eRepacementparts et al.
          I use Sears parts direct for parts ID and then purchase elsewhere at half the cost.
          Now having said all that I DO NOT use Windows. I use a Linux
          machine. Mint is probably the best for most non-computer types. Set it up for dual boot so you still have your Windows if you need it. I use Ubuntu, but I have printers, WiFi over all my 5 acres, and other goodies so I need a lot more “Tools” than Windows will let you do easily. I usually use Paypal to pay. I have never had a problem of identity theft.
          Shop on!
          Aloha.

          • bb in GA

            @rellik

            A workaround that works in my local Post Office is :

            bb in GA
            2899 Hoax Lane – Box 99
            Nothere, GA 30600

            Having the Box number with no reference to it being a P.O. box works very well and was suggested by a local USPS employee.

            Don’t know if it can be generalized, but it is worth a try.

            <bb

            • rellik

              bb,
              Thanks. Some sites are pretty savy and check for that
              I just add a second address
              usps box 1234.( lower case on purpose)
              That has always worked.
              What really gets me is a flat rate priority
              package costs as much to ship from Missouri to Maine as it does to Hawaii, but their site rejects Hawaii or AK or Guam for that matter because it is not CONUS.

        • Shopping online is easier

          I prefer shopping online to having to deal with rude sales people, going to the store and finding out they’re out of stock, the traffic, looking for a parking place, loading up my vehicle, unloading when I get home, much easier to sit at my desk and get things delivered.

      3. Frank Thoughts

        Retail has always been volatile and long may it be so. In a free society focused on keeping the customer happy, retailers will flame out and be replaced by better competitors who understand what people want. Do you want the stability of the long lines of the Soviet Union?

        I am glad Amazon is thriving, they deserve it. But I also patron American businesses who deserve my custom and work for it: Filson, Red Wing, Whole Foods, Shinola, Tom Ford, Ralph Lauren etc. America has great brands and products so get out there and buy their stuff. You can’t complain if all you do is go to Walmart and buy cheap garbage from China. Save your pennies and buy the better American product. And if that means having less, then do that. Supporting quality American brands and products should be how you spend your dollars.

        • Yahooie

          Amazon bought Whole Foods. They always ask if I’m a Prime member when I check out.

      4. Khemp

        I do a great deal of online shopping. The world changes.

      5. aljamo

        5G is another step in the loss of freedom indicating the non stop push to get this setup going. Still no word from the pushers of this technology as to its safety. If everyone ditched their spied on devices that would put a dent in the evil plans. Maybe people would then talk publicly about their planned demise and prove constitutional rights are still the foremost policy guaranteeing a free nation still exists.

      6. Bert

        People are spending money at record levels, the economy has never been bigger, tax revenues record after record, record number on entitlements, record money, record debt, record assets, record obesity, record sending money overseas to foreign governments, record stock markets, record, record………

        yet

        There’s No End In Sight For The “Retail Apocalypse”

        I wish you would pull your ass out of your head.

      7. Bert

        The way people are today, only a foolish idiot would go shopping at a store, exception groceries.

      8. Honeypot

        Why did God make us?

        Somebody has to pay retail.

        .

      9. Anonymous

        Nothing but more doom and gloom bullshit here.

      10. owens

        Anti Whites say:

        Open Borders! (for white populations only)
        Noone is Illegal! (where white people live only)
        Diversity is a strength! (for non whites moving into white places only)

        Notice that “leftists” never demand open borders, ‘diversity or mass immigration into any non white population anywhere. Why is that? What is their real goal?

        Open borders, ‘diversity’, mass immigration… Why are these White ‘Privileges’?

      11. Amazon

        I prefer to avoid Amazon, having worked for them in the one day delivery part of the business. They have a really vicious way of exploiting young people, and I have seen many seriously hurt themselves but refuse to report it for fear of losing their job or status, though Amazon doesn’t punish them for that, just makes them afraid they might be punished that way. It’s a psychologically exploitive environment for the young. Being older, it was much easier to cope with.

        However, now I am working for the USPS, and the whole environment is so much better. Amazon has turned a new leaf on going postal.

      12. Clown World

        The r etail sector operated on minimal m argins.

        There would be a s ubsidy or a d onation from a s pecial i nterest g roup.

        Then, all the f ull t ime floor m anagers, in a given f inancial q uarter, resembled the d onors’, politically.

        I have been in some big box s tores, where a whole row of c ashiers all looked the same. Height, weight, age, complexion.

        Or, the floor c rew all has the same exact ratio of demographics, on the same s hift, all over the same strip m all.

        Since your b usiness model is *plainly to launder s ubsidies, probably, all you would have to do is h ire Republican q uota cases, under that administration.

        afaic, they are composed of your same, beloved, replacement demographics. Because of politics, it doesn’t even occur to you that they are part of the legitimate l abor pool.

      13. Anonymous

        A lot of the retail that is collapsing is “fast fashion,” and people generally don’t have the money to purchase such clothes any more. But also, part of it has to do with time, too, as people generally no longer have time to spend hours at the mall, which was the case 20 years ago. Instead, they often have two jobs. It may be that a lot of people’s budgets, too, have shifted toward electronic devices and their plans, although you do get a lot of value from your smartphone. Online shopping not only saves money, but it saves time – and of course it can be done on that smartphone that takes away customers from these mall retailers. On the same note, the lack of not only money, but time, and the shift toward electronic devices, may also explain much of cord cutting – and like mall retailers, these customers aren’t going to come back.

      14. RickGee

        There is not a retail crisis. At most, there is a retail brick and mortar store crisis. My wife does a lot of shopping, for various reasons, and avoids stores whenever possible. She does almost everything online. She’s buying as much, or more, as ever, which I believe is generally the case. Stores are closing because people are using technology, which is more convenient and provides more options.

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