Retail apocalypse: Too many stores (and jobs) are going, going, gone

Barely a week goes by without hearing about another chain of retail stores declaring bankruptcy or slashing the number of stores nationally.

We’re only one-third of the way through 2019, and already U.S. retailers have announced the closure of nearly 6,000 stores—5,994, to be exact. That’s already more than the 5,864 stores that closed throughout the country in 2018. And the investment firm UBS projects that 75,000 stores could close by 2026. That would include more than 21,000 clothing stores, 10,000 consumer electronics stores, and 8,000 home furnishing stores. By then, online shopping is expected to make up 25 percent of retail sales, up from 16 percent now. Overall, retailers have closed more than 15,000 stores since 2017, UBS says.

It’s easy to think about this situation as just a change in buying habits—more people buy items online, and fewer patronize brick-and-mortar stores. That’s true; the average U.S. household spent $5,200 online in 2018, up nearly 50 percent from five years earlier. And people are still buying—retail spending overall grew 4.6 percent in 2018. But every time a store closes, people lose their jobs, especially women.

Economists differ in their projections about the world and  U.S. economies in 2019. Many see slower growth than in 2018, and some even predict a recession. The National Retail Federation sees a slowdown compared to last year’s spending, meaning that people won’t be buying as much, either online or at physical stores.

Retail sales make up 70 percent of economic growth, and projections on retail sales aren’t good. A healthy economy generates annual retail sales growth of 3 percent or more. But the report from February showed that sales fell by 0.2 percent. Even the latest report of economic growth showed a slowdown in consumer spending.

Business Insider keeps a running total of the stores that have announced bankruptcies and liquidation. In some cases, filing for Chapter 11 bankruptcy allows companies to restructure and reopen on a smaller scale, shedding debt as well as employees. Other times, the stores’ workers are out of luck—and out on the street.

from Daily Kos http://bit.ly/2J3hsld