IS BRICKS AND MORTAR RETAIL COLLAPSING?

If you consider that over 3000 stores are closing, then yes?

More than 41,000 people have lost their jobs in the retail industry so far this year — a 92 percent spike in layoffs since the same time last year, according to a new report.

And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a “standard annual review.”

Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe.

“This is significant, and marks an acceleration of store closures and job cuts in the near term,” said Mark Hamrick, a senior economic analyst at Bankrate. “Retail is ground zero for seeing the shifts of change in our lives.”

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner. “While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”

“In the post-digital era, only the strong will survive,” Ron Johnson, CEO of Enjoy, a retail technology company, told NBC News. “You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”

Johnson previously worked as head of retail for Apple and opened the first Apple Store and scaled it out to 1,200 locations. He then went on to serve as the CEO of JCPenney, but has no connection to this week’s store closure notice.

That’s the formula being followed by some retailers who are winning in the sector. This week, Lululemon rallied to an all-time high after a strong holiday earnings report. Walmart also announced a strong holiday with e-commerce growth of 43 percent.

However, increased competition from e-commerce giants like Amazon continue to cause ripple effects for traditional brick and mortar retailers.

“There’s no doubt that the retail industry is undergoing a rapid transformation due to shifting consumer preferences and new technologies,” said Matthew Shay, president of the National Retail Federation. “Successful retailers view this transformation as an opportunity to reinvent the shopping experience for customers who are embracing both e-commerce and in-store, not one or the other.”

President Donald Trump has been an outspoken critic of the effects that retailers — and Amazon in particular — have had on small communities, tweeting last April that “States and Cities throughout our Country are being cheated and treated so badly by online retailers. Very unfair to traditional tax paying stores!”

In addition to the threat from e-commerce, brick-and-mortar retailers are also staring down a shift in consumer preferences.

“Consumers aren’t ceasing consumption, they are changing what they are consuming,” said Bankrate’s Harmrick. “Those dollars are finding a fair amount of competition with services like what Apple released this week,” he said, referring to the tech giant’s launch of a news subscription and streaming video service.

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2 Responses to IS BRICKS AND MORTAR RETAIL COLLAPSING?

  1. Toxic Deplorable B Woodman says:

    Depends on the size of the store, and what they’re selling.
    My daughter owns and runs a store (Spoox Bootique), a little one, maybe 500 sq feet (or less?). She has a FB presence, and does well enough to help support her family (her husband has a lawn care, landscaping, and handyman business in a trailer park).
    I have watched their child growing up in that store. She’ll grow up to be another Wednesday Addams.
    Anyway………
    What she buys, and sells, she would not be able to make a profit off of a web store. At least not for the present. ANd she enjoys the interaction and give and take with her customers, friends, and artist vendors that make up the store’s “family”.
    We all celebrated the store’s 7th anniversary this weekend, with the annual Artist’s Fair, with all their vendors and artists. Lots of fun! Seven years! Who knew!

  2. Leonard Jones says:

    This fits right into the Walmart story as well. The reasons some brick and mortar
    stores fail beyond a lack of online presence. Orchard Supply Hardware had a
    web site but it was so badly designed, I could walk to the store faster than I
    could find an item I was looking for using keyword searches at home. If the
    web designer did not involve a hardware specialist, you could look up a
    conduit clamp and the search result might turn up a bracket.

    One of the best-designed web pages was Ritz Camera. They closed up their
    stores years ago because they figured why bother with the extra employees and
    overhead? Grocery stores, pharmacies, restaurants, etc. are always going to
    be with us. Anything we need in a hurry will remain brick and mortar.

    Walmart will still have stores because they have a great online presence.

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