They call it “the retail apocalypse.” Just as accurate would be to call it “retail gone bonkers.”
Hopefully one day, we’ll look back and call it the beginning of the retail renaissance.
Cataclysmic nicknames are fun and all, but the truth is that none of us really know how this retail upheaval is going to shake out. Everything is up in the air. Everything is changing and nobody knows how it’s going to land. Still, brick-and-mortar stores are closing in front of our faces every day, major chains keep going bankrupt, and it feels like Armageddon indeed.
As the experts have been saying for years, developers built too much retail space during the boom years – and that was the case even before e-commerce came along and made more of it unnecessary. We have about 23.5 square feet of retail space for every man, woman and child in the country. That’s more than anywhere in the world.
But even if retailers are “downsizing to greatness,” “pruning for excellence” or whatever companies call it when they close stores, the shake-up is jarring. And if you’re a brick-and-mortar retailer, a commercial landlord, a department store employee or anyone in a million other lines of business, you’ve got every right to be terrified by the current state of of retail chaos.
So, what’s the damage so far this year?
Well, it’s 47% worse than all of 2018, according to retail analysis firm Coresight Research. By April this year, retailers had already announced more store closures than they had during all of 2018.
The numbers are bananas. As of Sept. 27, retailers have announced 8,567 store closures across the country, not including Forever 21’s upcoming 178 closures. That’s compared to 5,844 closures for all of last year. Store closures could reach 12,000 by the end of the year, Coresight estimates.
Store openings are up, too. So far, almost 250 more than all of last year.
And I bet you can guess who the top three companies are that are adding locations. Yep, that’s right, they’re all dollar stores. Dollar General has nearly a thousand, followed by Dollar Tree with 348 and Family Dollar with 202. Full disclosure, they’re closing some locations, too.
Number four on the list of openings, though, might throw you for a loop.
It’s Green Growth Brands, which is in the cannabis business and owns several different CBD and marijuana-related companies. Its brands include Seventh Sense, a line of CBD-infused beauty products; Meri + Jayne, a lifestyle brand that markets things like CBD-infused water; and Green Lily, a spa-like marijuana dispensary geared toward women. Green Growth Brands has announced 178 store openings this year, admittedly a drop in the bucket in the face of all those closures.
The dollar stores don’t exactly point to a retail renaissance – not a very exciting one, anyway. But they do say something about the reality of today’s brick-and-mortar shoppers, who want affordable, convenient, nearby stores where they can find a good-enough mix of things they need, on the spot, without having to walk through miles of aisles to find it.
The top store openings also say something about who needs physical space and who doesn’t. CBD is a complicated product that is new to the market, serving a wide variety of customers who have lots of questions and want real people to answer them. The cannabis market is white hot, with retail implications that haven’t even been imagined yet.
The disruption of the industry doesn’t have to mean its destruction. For consumers, there is a bright side. Traditional retailers have been knocked out of their complacency and have had to step up their game to compete with companies, like Amazon, that, warts and all, are revolutionary. It is survival of the fittest. And what’s yet to come is likely beyond our wildest dreams.
Toilet paper math is the hardest kind of math