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Ambiguity in the "Over-Retailed" Argument

As "retail apocalypse" quickly became the moniker to describe the ongoing evolution in retail, one rationale for its occurrence is that the US retail marketplace is geographically "over-retailed."

There is merit to this argument, especially when considering the statistics from Cowen and Company that show that between 1970 and 2015 the number of US malls grew twice as fast as the population. This growth lead to the US having 23.5 square feet per capita of gross leasable space followed by a distant Canada and the UK having 16.4 and 4.6 square feet per capita respectively.

However, consider this. As the national retailer footprint grew to fill the available space, the supply of multiple store locations from the same retailer in a metropolitan area presents an equal "over-retailed" argument. Unless it is a specialty retailer, it is no longer necessary to supply multiple locations with common items that can be easily purchased online for a lower price.

No wonder the ubiquitous Abercrombie & Fitch is slated to close 60 stores this year.

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