What Are Shutting Down Retail Stores Saying?

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Retailers have announced plans to close more than 1000 stores this year, and experts say the total could reach 10,000 stores or more.

Mass closures, referred to as the retail apocalypse, have continued over the past few years. 

Per Business Insider, in 2020, more than 8,300 US stores closed, following 9,300 in 2019, according to Insider analysis. Research firm Coresignt predicts this trend will continue into 2021-22.

There Is A Larger Picture

The trend of traditional big-box and established retailers closing doors is far from new. 

Disney, Best Buy, The Children's Place, American Eagle, and the Gap are just some of many brands that have announced store closures this year.

However, the closure announcements have made it difficult to see the bigger picture; retail vacancies are at their lowest.

Per CBRE, overall retail availability in the US fell to a 10-year low of 5.9%, while neighbourhood, community, and strip centre availability also hit a 10-year low of 8.3%.

More To It Than Meets The Eye

There are many headlines about closures but few regarding openings. And this data suggests there are more of the latter.

Take for example, online grocery brand BigBasket, which plans to open 1,000 new Fresho stores all over the country in the next 4 years. 

Jockey has just opened its 1,000th exclusive retail store in India. 

Low Quality Class B, C Assets

Retailers struggle in locations that are poor. To move the industry forward, and for traditional retailers to ensure success, they need to clean house of their poor performing assets. 

It's not a depiction of the industry's failures but rather affirmative of its future.

In One Sip

Retailers are shuttering stores because it allows them to re-design their store models and meet consumer demand for experiential retail. 

It's a natural evolutionary process essential to survival and good for the industry. And ultimately, despite the closures, demand for retail real estate is on the rise.