Retail’s Future Looks Gloomier: 25,000 Closings Could Be Coming
About 4,000 Planned So Far This Year as Companies File for Bankruptcy or Shut Forever
An estimated 25,000 retail stores across the United States are expected to go dark this year, breaking last year’s record by a long shot. That stunning figure is poised to put additional pressure on already struggling landlords and fast-track the dramatic shift in how and where consumers spend their money.
Already 15 major retailers have filed for bankruptcy protection, many in May alone as the coronavirus crisis forced all but essential stores to close for nearly three months beginning in March, as tracked in a new report by industry group Coresight Research.
As a result, Coresight is forecasting closings in the 20,000 to 25,000 range, far outpacing the firm’s original 2020 projection of 15,000 stores shutting down forever and blowing past last year’s 9,300 record collapse.
Clearly, the pandemic sped up the evolution into a new consumer-spending paradigm seen in recent years. Coresight ascribed the shift to what it called an “e-commerce disruption” as well as the “trend of discretionary spend incrementally moving from products to services as shoppers demonstrated a preference to spend on experiences rather than discretionary product purchases.”
Already Coresight has logged 4,005 planned store closings as of Friday. More than half of those, 2,059, can be accounted for by only six retailers: