Report projects 75,000 retail closures by 2026

The “retail apocalypse” isn’t over — not by a long shot, according to one investment firm.

A recent report by UBS projects that 75,000 stores will close by 2026, including 21,000 clothing stores, 10,000 consumer electronics stores, and 8,000 home furnishing stores.

Where will consumers of the mid-2020s be shopping? Online, of course. UBS projects that the percentage of all purchases made online will rise from roughly 16 percent right now to about 25 percent over the next seven years.

Affliction or antidote?

That’s bad news for brick-and-mortar retailers across the country. Or is it?

John D. Morris, a senior analyst with financial services firm D.A. Davidson, optimistically described the expected store shutterings as “a healthy cleansing for the retail industry.” He continued: “We’re in the middle of a multiyear retail purge. Companies are finding that when it comes to stores, less is more.”

A Traumatic Decade

The 2010s have decimated once prosperous retailers.

Toys R Us is gone, and other former giants like Sears and JCPenney are going. Discount shoe seller Payless ShoeSource filed for Chapter 11 bankruptcy in February and will soon close all 2,100 of its U.S stores. According to another recent report, 41,000 retail employees lost their jobs in the first two months of this year, reflecting a more than 90 percent increase compared to the same timeframe last year.

A Brave New World

Survivors of what has come to be called the “retail apocalypse” have had to adapt to the new status quo.

“The trend is toward more streamlined stores: Less chaos, less inventory, less choice,” Morris said. “If customers want something in a different color or size, they can find that online.”

‘Darwin would love this’

Ron Johnson, CEO of Enjoy, a retail technology company, put it more bluntly.

“In the post-digital era, only the strong will survive,” Johnson told NBC. “You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”

Image courtesy of Pexels.

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