According to the Department of Commerce, American shoppers increased their spending in June leading to the fourth consecutive month of increased retail sales. Accounting for more than two-thirds of economic output, retail sales, including purchases at stores, online and restaurants, rose a seasonally adjusted .4% in June from May and rose 3.4% year-over-year. These increases are a strong indication that in spite of tariff threats and global growth concerns, consumers are strongly supporting the US economy. Something interesting to consider, however, is that although retail spending has steadily increased, which includes an 11.6% year-over-over increase in online sales, as of six months into 2019, according to Coresight Research 20% more store closings have been announced than in all of 2018. That is more than 7,000 stores slated to shutter so far this year with estimates upwards of 12,000 by the end of the year. Store closings are on track to beat the record year of 8,139 shuttered stores in 2017. The top 25 household names with the largest store closing announcements so far this year include:
Payless ShoeSource - 2,589 stores
Gymboree & Crazy 8 - 805 stores
Dress Barn - 649 stores
Charlotte Russe - 494 stores
Fred's - 442 stores
Family Dollar - 390 stores
Shopko - 371 stores
Charming Charlie - 261 stores
GNC - 233 stores
Gap - 230+ stores over the next 2 years
Walgreens - 195 stores
Foot Locker - 165 stores
Signet (Kay, Zales, and Jared Jewelers) - 150 Stores
Ascena Retail - 120 stores
Destination Maternity - 117 Stores
Sears - 72 stores
Pier 1 Imports - 57 stores, but could be up to 145
L Brands (Victoria's Secret) - 53 stores
Office Depot - 50 stores
Vera Bradley - 50 stores
Kmart - 48 stores
CVS - 46 stores
Party City - 45 stores
Sears Hometown and Outlet - 45 stores
The Children's Place - 45 stores
There is no doubt that retail is evolving at an unpredictable velocity. The challenges those faced with closing stores, however, really has not changed - too much debt, no effective and timely omnichannel strategy, and an inability to adapt to evolving consumer behavior. While brick-and-mortar retail is still relevant, especially considering its impact on branding a retailer and improving online traffic, how the market will balance out the number of stores required shows no signs of settling. As the saying goes, the beatings will continue until morale improves.