Major retailers across the country are closing brick-and-mortar stores at an alarming rate, in what some are coining the “retail apocalypse.”
At least 8,600 stores are expected to close in 2017, as consumers shift their spending habits online. The effects of the closures are far-ranging, impacting the job market and retail destinations in Dayton, Springfield and Cincinnati. Here’s a look at what’s happening:
WHAT STORES ARE CLOSING?
Retailers that have closed locations include: The Limited, Family Christian, RadioShack, Sears, Kmart, JC Penney, Macy’s, BCBGMAXAZRIA, Bebe, Crocs, GameStop, American Apparel, Guess, Gander Mountain, Payless ShoeSource, and Rue21.
View the full list here.
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HOW MANY PEOPLE ARE AFFECTED?
At least 100 stores have closed or will close this year in Ohio, affecting thousands of retail workers. A new research report from brokerage firm Credit Suisse estimated that more than 8,600 stores will close this year, up from the 2,065 that closed last year and the 5,077 store closures in 2015.
Nearly 61,000 jobs have been eliminated in the retail industry since January, according to a report from Marketplace. However, retailers say they are adding more distribution jobs to keep up with online shopping demands.
WHY IS THIS HAPPENING?
Retailers are shifting to meet the demands of consumers. As more shoppers use their spending power online, big retailers are investing less in brick-and-mortar stores.
In March, In the last month, retail sales grew just 0.3 percent compared to February and 2.8 percent compared to the same time in 2016, according to the National Retail Federation. However, online sales jumped more than 11 percent compared to the same time last year.
» RETAIL APOCALYPSE: Record number of stores could close in 2017
Future brick-and-mortar stores will have to be convenient, quick and unique, experts say. Online retail giant Amazon might be leading the way.
Amazon is launching a new kind of brick-and-mortar store that means never having to wait in a line again. The new concept Amazon Go will give consumers “the world’s most advanced shopping technology so you never have to wait in line,” according to the online retail giant.
WHAT DO THE RETAIL EXPERTS THINK?
“When you’re talking about sales that go to online-only retailers that don’t have presence here, that’s a shift in consumer demand,” said Gordon Gough, president and CEO of the Ohio Council for Retail Merchants. “Will it have an impact on the local economies? Sure.”
“The idea of ‘winner take all’ is just plain silly,” said Lou Conforti, CEO of Washington Prime Group — the owner of two local malls. “There exists a symbiotic relationship between physical space and e-commerce which affords us an opportunity upon which we will continue to capitalize.”
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“With our leasing efforts, we try to introduce new and exciting tenants as well as keep the ones that reinvest in our center,” said Kristie Miller, general manager of the Mall at Fairfield Commons. “It’s also just about reminding our community that brands come and go. I think when we have a store closing, to the public it seems like, ‘Oh, gosh. They’re closing. They’re going out of business.’”
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