Economic Recovery? 9000 Stores Will Close This Year in the U.S.
Back in January, after the worst Christmas sales in a decade, I predicted that 2017 would be the year of the Retailpocalypse and that we’d see hundreds of retail stores closing.
Sadly, I was wrong.
We’re going to see thousands of stores closing.
According to a CNN Money report, more than 300 retailers have filed for bankruptcy already and we’re only halfway through the year.
Another report by Credit Suisse has an even gloomier prediction:
…around 8,640 stores in the U.S. will close by the end of 2017 — easily surpassing the number of stores closed in a year over the past two decades. (source)
When retail stores close, it affects everyone.
Even if you’re not much of a consumer, when retail stores close, it can still affect you.
- Higher rates of unemployment mean more competition for available jobs.
- When larger stores in a mall close, it often takes down the other stores with it.
- Thousands of newly unemployed people are adding even more weight to our already strained social safety net.
- Scarcity drives up prices.
Retail stores can be a glimpse at how our economy, in general, is faring.
Underserved communities have a lot of problems that are all rooted in the loss of their retail stores.
When consumers have to drive further for everything, that is like a tax on everything they purchase. Travel time, expenses, and wear and tear mean that they’re spending just a little bit more on everything they buy.
Often, people begin moving out of smaller towns that are bereft of retailers because it’s so inconvenient to purchase the things they want or need. Others leave because they lost their job and there were no other jobs available. Property values decline.
Mom and Pop stores that existed before the chain retailers arrived were often driven out of business. Fewer options mean higher prices at any stores still remaining.
At this moment, the number of working age Americans that do not have a job is hovering near a record high. So being able to at least get a job in the retail industry has been a real lifeline for many Americans, and now that lifeline may be in grave danger.
For those running our big corporations, losing these kinds of jobs is not a big deal. In fact, many corporate executives would be quite happy to replace all of their U.S. employees with technology or with foreign workers.
But if the middle class is going to survive, we need an economy that produces good paying jobs. Unfortunately, even poor paying retail jobs are starting to disappear now, and the future of the middle class is looking bleaker than it ever has before. (source)
These stores could be filing for bankruptcy or closing their doors this year.
Some experts predict that one in four malls will be closed within the next five years.
The retail apocalypse is real.
So real, in fact, that 20 to 25% of all U.S. malls will close by 2022, according to new research from Credit Suisse.
That translates to 220 to 275 of the nation’s 1,100 shopping malls, the research note said, according to Fortune.
Fueled by the rise of e-commerce, mass store closings and bankruptcies, brick and mortar retail stores have been closing around the U.S. at an increasing rate. And the fight against e-commerce giants like Amazon will only get worse. (source)
According to a Moody’s Investor Service report, the outlook is extremely grim for the following retailers, who have been downgraded to the lowest ranking on their credit spectrum. All of these brands/retailers are now classed by Moody’s as “subject to very high credit risk.”
- Boardriders SA
- Bon Ton
- Cole Haan
- Charlotte Russe
- Charming Charlie
- J. Crew
- David’s Bridal
- Eddie Bauer
- Fairway Market
- MAG Retail
- Neiman Marcus
- Ninety-Nine Cents Only
- Nine West
- Tom’s (weeps – I love those shoes)
- Totes Isotoner
- Tops Friendly Market
- True Religion
This is on top of stores that were in trouble or whose projections were down back in January:
- American Eagle
- Finish Line
- Men’s Wearhouse
- The Children’s Place
Here are some steps you can take to protect yourself in a crumbling economy.
I really don’t believe that all of this can be blamed on Amazon. We’ve become a country of consumers instead of a country of producers. We work to pay for things that profit huge corporations who have their goods produced for pennies in other countries instead of working to produce these things ourselves.
That, in my opinion, is the problem in a nutshell.
There are a few things you can do to provide some stability.
- Get out of debt. Here’s a way to pay it off as quickly as possible.
- If you find yourself without a job, here are the first steps you should take to survive the aftermath.
- Reduce your fixed expenses.
- Build an emergency fund.
- Get prepped.
- Keep abreast of the news that could directly affect you. Sign up here for free daily tips and updates.
The most important prep you can make when the future is questionable is to learn to become a producer. Learn to meet your own needs by growing food, providing a necessary service, or creating something that people will always need.