Retail Store Closures Soar In 2014: At Highest Pace Since Lehman Collapse

Tyler Durden's picture

What a better way to celebrate the rigged markets that are telegraphing a "durable" recovery, than with a Credit Suisse report showing, beyond a reasonable doubt, that when it comes to traditional bricks and mortar retailers, who have now closed more stores, or over 2,400 units, so far in 2014 and well double the total amount of storefront closures in 2013, this year has been the worst year for conventional discretionary spending since the start of the great financial crisis!

From Credit Suisse's Michael Exstein

Since the start of 2014, retailers have announced the closure of more than 2,400 units, amounting to 22.6 million square feet, more than double the closures at this point in 2013 (940 units and 6.9 million square feet). After several years of attempting to cut overhead costs, the acceleration in store closures appears to be a response on the part of retailers to cope with the challenge of ecommerce and structural declines in foot traffic, and the need to address declining levels of in-store productivity. The year-to-date totals for store closing activities now challenges 2009 as the most recent year for the highest number of store closings announcements.


While distressed retailers (eg. Radio Shack) and bankruptcies, which have reached a three-year peak year-to-date, make up 63% of the unit closures in 2014, they comprise only 34% of the total square footage closed. On a square footage basis, broadline retailers  contributed over 28% of closures, with M, DDS, JCP, TGT, and Sam's Club participating in right-sizing their store bases.


Office supply stores have been equally significant contributors to the rationalization process as they grapple with the effects of broader distribution and deeper online penetration. We expect this trend to continue as Office Depot evaluates its real estate in the wake of its merger with OfficeMax. Even dollar stores and drug stores, which combined have consistently built out hundreds of stores per year, are beginning to reel back on expansion, with Family Dollar and Walgreens both planning to shutter  underperforming stores.


The acceleration in retail closings follows several years of negative sales growth for many retailers. After slashing expenses and taking a more disciplined approach to spending, there appear to be few levers left to pull, as the top line growth remains difficult. Mall-based stores (both department store anchors and specialty apparel) in particular appear to have taken advantage of leases that have come up for renewal, as opportunities to close underproductive stores. Those that have not participated in the trend to close stores—such as higher end retailers (eg. JWN, Bloomingdale's, and Saks)—have been relocating existing stores to more productive malls, or areas of existing malls. JWN for example recently announced the relocation of its Westfield Horton Plaza San Diego store to an upgraded area within the same mall, and is doing the same thing in Honolulu at the Ala Moana Center. 

Of course, it wouldn't be a Wall Street sellside piece if there wasn't a bullish spin on the data:

We would view more momentum in store closures as a positive for the retail industry. Retail as a whole remains overcapacitied.... further rationalization appears to be a necessary change in trend where even during good economic times the store base is being adjusted

Yup - nothing but blue skies ahead.

In fact, here is some more good news. As Bank of America notes, Consumer Durable spending - another key component of any, well, durable recovery - is founering. In their words: "Durable spending has had a very weak recovery by historic standards. The ratio of consumer durables to GDP shows that while the share of spending has recovered, it remains at recessionary levels."

Don't worry, that too is "positive" for the... making shit up industry.

Of course, who needs to spend on durables when one can just spend on stocks that in the new normal can never, ever go down?

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IridiumRebel's picture


ParkAveFlasher's picture

Hey Mo, hey Mo ... nyuck nyuck nyuck. 

TruthInSunshine's picture

Recovery Year 5! Booooooyah!!!

"They'll" do whatever it takes to keep the "stawk market" from crashing during this mid-term election year...


*By SNAP/EBT, Social Security, Medicare, Aid to Families with Dependent Children, Unemployment Insurance, Extended UI, Thaw Heating Assistance, Social Disability Insurance (SSI) -'and reverse mortgages, credit cards (21% average interest rates now), AND POPPIN' TAGS, BITCHES!!!

*Buy stock in that online dating service FOR FARMERS ONLY (because "city people don't understand") - I saw a commercial for this stock company on teeeveee & would've swore it was a parody, but it wasn't...

Carpenter1's picture

Look at the lead up to the crash, 2007 and 2008. It's clear these fools don't take action until the walls are burning around them and all the smoke alarms are on fire.
Everyone is all in and desperate to prove things are fine. We are witnessing 5 years(and counting) of the evidence for how delusional people will choose to be when faced with reality.

insanelysane's picture


fixed it for you, Roman Empire style.  when it comes to collapses go big or go Rome.

I am more equal than others's picture




Get those valuation whores from CBRE or Cushman Wakefield to appraise them - tell them what value you want and that they can charge duouble fees once the loans close - take out a maximum LTC mortgage - take cash out - walk away - really fly away with the new Barron aircraft - to somewhere south and sunny.  Buy a condo on the beach and smile.  Never make a payment.  File bankrupcty right before the 12th hour.  Your presonal recovery.  Spend it like its yours.  Live like a politician or better, a bankster.  Smile and remember you can't take it with you. 

Headbanger's picture


I hope this means the mom & pop Main Street stores kick some ass now cause they don't have the bloated corporate overhead and actually help their local customers find what they want to buy!

What a concept!!

Love my 100 year old general store for it!  And their awesome beef jerky too!

Wahooo's picture

Like we need moar stores.

TruthInSunshine's picture

Restaurants from Mickey D's to Ruth Chris, and the Starbucks &
Chipotles, too, are busting at the seams with the extremely large flock of plastic yielding Visa/Discovery/Amex/etc. grazers.

Both Whole Foods & Starbucks accept SNAP/EBT Cards now, as they need to maintain their revenue stream by all means necessary.

wallstreetaposteriori's picture

I guess next years pending jump in same store sales growth will be viewed UBER BULLISH!  I doubt these stores were to closed due to the weather excuse.... it must be the consumer is broke and indebted to their eyeballs reality....

codecode's picture

Recent flyer from local Pizza delivey restaurant has printed "Now accepting EBT"... guess you can't blame them, go where the money is...

cnmcdee's picture

The model is clearly changing.

1. Rampant comsumerism in North America is finished. why? Because there is a rapidly shrinking middle class being replaced by an elite in China running slave shops.

2. People are psychologically shifting away from buying that which they do not need .

3. The Aging population in the United States does not drive GDP like young people with lots of kids.  Harry Dent covered the 11 year delay between what happens in Japan and the United States well in his book The Demographic Cliff which I recommend reading.

4. The United States does not produce much any more! All their production was moved off shore! If they were ever required to consume what they produce they would turn into a third world nation over night.  I think the trigger point will be when Russia forces Europe to buy natural gas and oil denominated in either Euros or Rubles.  The moment that happens I figure the dollar will fall off the fiscal cliff and you'll see bread at $15 / loaf.  Meanwhile US Senators (super-retards) are PUSHING TO PUT SANCTIONS ON RUSSIA, who is doing the United States a massive favor of using the United States dollar.  Are they f*ked in the head?  The first repurcussion of Russian Sanctions *WILL* be the total abandonment of the US dollar by Russia, and even China.

TruthInSunshine's picture

Real inflation on necessities of life (food, energy, housing, etc.) is building rapidly and will be the catalyst that triggers the next crash (which is now visible to those with good eyesight), which is much closer than many either admit and/or realize.

Compare real wages with real inflation on INFLEXIBLE (i.e. necessary) costs of living & spot the massive gap between the these two metrics.

Whatever can't be sustained, isn't sustainable.

There's little doubt in my mind that real inflation on necessities is now running at least 7% annualized, and this is before one considers the higher tax-flation, regulatory-flation, health care impacts & other increased costs of living just now starting to kick in.

This is why discretionary is getting murdered in the real economy & the pain has only just begun - we're going to see a watershed moment & historic, structural shift in spending on necessities vs discretionary goods/services unlike anything in our lifetimes in the near future (it's already underway).

lakecity55's picture

I think it is on purpose.

They must kill the dollar.

drendebe10's picture

Let's have a standing ovation for the arrogant, narcissistic lying illegal alien indonesian muslim sociopath fudge packer in chief who made this all happen while living  its grand imperial golf lifestyle at serf and peasant tax expense.... and don't forget the $17K dress for the wookie...

Monty Burns's picture

What's not addressed here and in many other ZH reports is whether the drop in  bricks and mortar sales is being replaced by on-line transactions.  That's the key point, because if they are it just means technology-driven channels swapping rather than a retail collapse as such.

TruthInSunshine's picture

Online transactions are contracting, also.

Look at the real numbers (strip several layers of the onion off to get at the accurate data) for shippers like FedEx & UPS.


Ignatius's picture

Now compare this and other retail closure events with the "retail hiring" line on the official unemployment stats published each month.

mayhem_korner's picture



Retail employment numbers mights still be up if you include the immigrants spinning the Liquidation Sale signs on the street corners.

McMolotov's picture

Isn't that shit depressing? I must have seen ten of those guys this weekend.

On a related note, I went to PetSmart on Saturday, and there's a Best Buy at the opposite end of the shopping center. The Best Buy literally had five cars in the lot, and this was at 2 in the afternoon.

Colonel Walter E Kurtz's picture

Petsmart and Best Buy....both depress me.

Che Guevara is Dead's picture

Over the weekend saw a box with a robotic-like arm waving a sign. At least it looked sober.

The SEIU better organize these meth heads before it's too late. 

rosiescenario's picture

....yet HOG sales are doing just fine (allowing for a little weather glitch).


This one is quite a puzzle....I guess the TBTF bankers are buying them.

NotApplicable's picture

Upscale is the only level of retail I see having any success. Thing is, there's likely over-capacity there, too.

cynicalskeptic's picture

Then why is there a new CVS every 4 blocks?

Walgreens is opening all over in the city as well.  What's with all the drug stores?

john39's picture

heavily medicated is the NWO way.  cue, the pusher....

Monty Burns's picture

Large doses of Ritalin for schoolboys who refuse to behave like schoolgirls.

29.5 hours's picture



Some people may knock your socio-medical idea but I feel the same. Altho Ritalin use is up for girls, the vast majority of victims of this drug policy are boys who commit the crime of not being able to sit in hard seats continuously for hours.

Kids were meant to learn on the move. Anything else is like a prison.



Bastiat's picture

Because most americans spend the last third of their lives getting fatter, sicker and carrying ever larger bags of pills. 

2bit Hoarder's picture

For the same reason insurance companies over hired ... the concept of 40 million americans ignoring the law that mandates they purchase health insurance was never even considered.  Which is why they all backed Obummercare ... 

SDShack's picture

Insurers backed 0zer0care because they WROTE 0zer0care with a win-win clause. They either get 40 milion new HC subscribers, or the Govt Taxpayer BAILS OUT the Insurance companies on their losses due to implementing the law without getting the new HC subscribers. That little FACT will be known to everyone this Summer when 0zer0 is forced to Bail Out these insurers rather than losing the lawsuits that will be filed. The backlash to these bailouts will be epic, and only eclipsed this fall when the double digit 0zer0care premium increases hit along with the cancelling of tens of million of Employer Sponsored HC plans. The 0zer0care diaster is just getting started and is going to get infinitely worse in the next 6-18 months.

TruthInSunshine's picture

Walgreens is the largest dedicated brick & mortar pharmacy chain store & has announced plans to begin closing stores.

Watch taxflation & real inflation (including health care inflation) on necessities, which is beginning to catch fire, force even more "inflexible/non-discretionary" goods/service providers to "right size" in the coming years.

drendebe10's picture


Thank obamascare providing windfall profits for hospitals, insurance companies and drug companies at the expense of patients and those who actually provide hands on care of patients...

KansasCrude's picture

They are gaming the presciption drug pricing like a superstar.  Saw a PBS special on the price discrepancies on pricing and those two and especially CVS were screwing the pooch raw.   They compared a number of drugs and the price variances were incredible I'm talking some of them were 400% or more what other pharmacies were talking and that was brand name versus brand name and generic  vs. generic.  It was truly astounding.  Costco was the best of the big boys for offering best value and the corner drugstores (local) were also noted for making CVS look like drugsters of the channel.   What a bunch of Aholes...... but a great biz model for the present screw whomever you can.

Charles Nelson Reilly's picture

when healthcare costs, mortgages, food, education & taxes are out of control... what else does Obama expect?  Other than Him & W expecting us to go buy useless shit at the mall? 

NotApplicable's picture

I think you're supposed to be eating peas, or something.

TruthInSunshine's picture

Monsanto GMO round-up ready peas fortified with arsenic.

NOTaREALmerican's picture

This is just normal "capitalism".   We should want retail stores closing.   If they weren't closing there'd be a problem. 

Tulpa's picture

I'm all for creative destruction but we're seeing a NET loss, which is a bad thing.  Well, at least a symptom of a deeper bad thing.

lolmao500's picture

But but but but! We're in a recovery! Food prices and real estate hyperinflation doesn't matter! Real wages going down don't matter! People working more today for food and board than during feudal times in Europe don't matter! They had between 8 weeks and six months of vacations per year, you slaves MIGHT have 8 days a year, if you're lucky... while congress was 238 days in vacation during 2013... the elite makes more compared to the average guy than during the worst times in history... but eh, we're not slaves, we're free! The tevee told us so!

PacOps's picture

My friend has a nice soft couch you may consider spending time on now and again. /

TruthInSunshine's picture

Like this?

Moving in with parents becomes more common for the middle-aged

"Those aged 50 to 64 who live in their parents' homes has surged in recent years, reflecting the grim economic aftermath of the Great Recession",0,...

Los Angeles Times
By Walter Hamilton
April 20, 2014, 6:37 p.m.

Debbie Rohr lives with her husband and twin teenage sons in a well-tended three-bedroom home in Salinas.

The ranch-style house has a spacious kitchen that looks out on a yard filled with rosebushes. It's a modest but comfortable house, the type that Rohr, 52, pictured for herself at this stage of life.

She just never imagined that it would be her childhood home, a return to a bedroom where she once hung posters of Olivia Newton-John and curled up with her beloved Mrs. Beasley doll.

Driven by economic necessity — Rohr has been chronically unemployed and her husband lost his job last year — she moved her family back home with her 77-year-old mother.

At a time when the still sluggish economy has sent a flood of jobless young adults back home, older people are quietly moving in with their parents at twice the rate of their younger counterparts....",0,...

WTFx10's picture

No ,you must be wrong it has to be those fuckin poor people fucking us, they don't work at all. /sarc

Rising Sun's picture

Barry Barry Bullish!!!!!


Hopey Changey ONWARD!!!!!!!!!!!!!

Make_Mine_A_Double's picture

Just called Office Despot for a half dozen splitter cables. Drone left me on hold for 5 minutes and than came back and said they only sold them on line. Checked their half assed website and they were like 25 bucks apeice.

Cut and pasted same on Amazon and got it them for 8.95 each with free shipping.

Mid retail is dead, morte, doomed - over and done. They will just bleed out for the next few years, but they are toast. 


ParkAveFlasher's picture

Big boxes rent space >> prop up demand >> fluffs rent rates >> gives the suburbanites someplace to drive & spend >> needz carz & gasoleens >> must keep tax revenyooz afloat moar

disabledvet's picture

"Inflation masquerading as a recovery...inflation trading masquerading as worthy of a 100 million dollar bonus."

Utilities have moonshot as Wall Street/Washington nexus simply tells America to drop dead "but at least make it entertaining."

Just got back from Survivalist Camp in NH and driving from New York was like driving through the Zombie Apocalypse. These Cronies have really left America for dead this time and and indeed the first major defaults are now coming at this so called recovery like the Fukushima Tsunami.

Don't know how this one gets spun to gin up the voting booth but certainly the bulk of USA simply has given up on the whole "you're looking out for me" meme. How these folks cannot go home to their districts and not be stunned at what "in the name of terror" has been done to their people is beyond me.

The irony of course is that as these spreads flatten Wall Street gets flattened too .

Railroads look good. "Long boxcars" I guess as well.

Monty Burns's picture

When you say it's like driving through the Zombie Apocalypse do you mean from an economic/social or 'security' perspective?  Or both? 

Tulpa's picture

How these folks cannot go home to their districts and not be stunned at what "in the name of terror" has been done to their people is beyond me.

And 95% or more of them will be reelected in November by those same people.