Debunking the Retail Apocalypse
For the first half of 2017, anywhere you looked in the news there was a negative story about retail. Some major banners, particularly in Department Stores and Apparel retail, made significant announcements about the closing of stores, and this news spread rapidly. Then, somewhere along the way someone coined the phrase “Retail Apocalypse”, and headline writers jumped all over it. When our friends at Fung Global Retail & Technology released a report showing planned store closings surpassing openings for the first time in years, the complete narrative on the death of retail was formed. There was only one problem…the data was incomplete. Worse, it was contradicted by the total retail picture presented by the US Census Bureau. Those of us close to the industry knew retail was changing, but we also knew it was expanding both in locations and in sales.
After discussions with researchers at Fung Global, we quickly realized their numbers were based on deep research on public and large private Department Stores, Specialty Apparel retailers and Supercenters/Warehouse Clubs, with less focus on other segments and smaller retailers (that just so happened to be expanding rapidly). It’s great research, it’s just incomplete as a proxy for all of retail.
The following research from IHL Services is the result of a comprehensive view of chain retailers with 50 or more locations. The end result? Retailers and restaurants are opening 4,080 more stores than they are closing, and retail sales through July 2017 are up over $121.5b from the same period a year before. Further, if we were to include fast growing companies smaller than 50 stores, we estimate the total increase in store locations would be well over 10,000.
Download the IHL services' report to learn more.