Keep in mind that there’s always a glass half-full scenario despite how foreboding the future looks. This would be the case during the current COVID-19 pandemic where some estimates show that 25,000 U.S. stores may close this year. Legacy department stores, many of which serve as mall anchors, are among those that have announced closings, which will have a domino effect on many small and medium retailers as well.
But the brighter side of the picture looks to value-oriented stores, especially the discount and dollar category such as Dollar General, Dollar Tree, and Family Dollar, plus discount grocer Aldi. Then there’s off-price retailers such as TJX, Burlington, and Ross Stores, that attract shoppers for the in-store experience and thrill of finding big bargains, an experience that cannot be replicated online. So remember that even with all the empty storefronts both on main streets and in malls, there will be some stores finding success in difficult times.
The following excerpt is from a Wall St. Journal article which reports more on the topic:
U.S. retailers are on track to close as many as 25,000 stores this year as the coronavirus pandemic upends shopping habits. That is more than double the 9,832 stores that closed in 2019, according to Coresight Research. So far this year major U.S. chains have announced more than 5,000 permanent closures.
More buying is shifting online, and consumers are spending less than they did a year ago as they shelter at home, get furloughed or lose their jobs. A growing number of chains that were struggling before the health crisis have filed for bankruptcy protection in recent months.
“Bankruptcies are driving a lot of the closures,” said Deborah Weinswig, chief executive of Coresight Research, which compiled the data.
The dollar stores and discounters are bucking the trend. Dollar General Corp. is moving ahead with nearly 1,000 new stores this year, and its rivals Dollar Tree and Family Dollar also adding hundreds of new locations. With high unemployment and other workers furloughed, these chains are benefiting as shoppers tighten their purse strings. “It’s cool to be frugal right now,” Ms. Weinswig said.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
