The "Retail Apocalypse" Is Officially Descending Upon America

Tyler Durden's picture

Authored by Carey Wedler via,

Consumerism has long been a defining element of American society, but retail giants are now shutting down thousands of their locations amid a long-anticipated “retail apocalypse."

BI reports that over the next couple months, more than 3,500 stores are expected to close:

Department stores like JCPenney, Macy’s, Sears, and Kmart are among the companies shutting down stores, along with middle-of-the-mall chains like Crocs, BCBG, Abercrombie & Fitch, and Guess.”

Some stores, like Bebe and The Limited, are closing all of their locations to focus more on online sales. Other larger chains, like JC Penney, are “aggressively paring down their store counts to unload unprofitable locations and try to staunch losses,Business Insider notes. Sears and K-Mart are following a similar trajectory moving forward.

Sears is shutting down 150 Sears and Kmart locations, about 10% of their shops. JCPenney is shutting down 138 stores, about 14% of their total locations.

These closures are the consequence of several different factors. First, the United States has more shopping mall square footage per person than other parts of the world. In America, retailers reserve 23.5 square feet per person; in Canada and Australia, the countries with the second- and third-most space have 16.4 and 11.1, respectively.

Another reason retail brick and mortars are failing is the growth of e-commerce. Between 2010 and 2013, visits to shopping malls declined 50%, according to data from real estate research firm Cushman and Wakefield. Meanwhile, online sales from huge online outposts, like Amazon, have exploded.

Back in 2015, Forbes observed this trend:

Earlier this year, the stock market value of surpassed that of Walmart, a turn of events that many saw as indicative of how badly brick-and-mortar big box retailers have lagged behind in building up their e-commerce.”



Walmart is now hustling to bridge the gap, pouring billions into its tech to claw back some market share. Target, also a laggard, is similarly spending as much on tech as on its 1,800 stores. Both those companies, though, generate digital sales that are still only a small percentage of total sales, and a fraction of Amazon’s.”

At that time, Business Insider noted:

The list of failures is getting longer by the day. Macy’s? Cooked – down 42% over the past six months. Nordstrom? Down 20% over the same timeframe. Dick’s Sporting Goods? Awful earnings sent this athletic retailer lower more than 10% yesterday alone. There’s absolutely no way to sugarcoat it—the retail sector is crashing.”

Though Americans increasingly prefer to shop online, their preferences are also changing. Shoppers are choosing to spend their money on “restaurants, travel, and technology than ever before, while spending less on apparel and accessories,” Business Insider reports.

Further, as longtime retail analyst Howard Davidowitz observed in 2014, “What’s going on is the customers don’t have the fucking money. That’s it. This isn’t rocket science.”

As prosperity declines, shopping habits shift, and major retailers like Macy’s, Sears, and JCPenney close their doors, their decisions are likely to have ripple effects on smaller stores in shopping malls. Business Insider explains that in addition to dwindling attendance and income for mall owners, major department store closures can trigger “‘co-tenancy clauses’ that allow the other mall tenants to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the anchor space.”

As fewer retail giants seek retail space, many malls are facing dire fates, and many expect low-performing malls to be hit hardest by the changing scope of retail, noting roughly 30% of malls will face increased risk of shutting down.


Shopping malls first became popular in the economically fruitful era of the 1950s and 60s. Inspired by major department stores of the 19th century — like Sears and Macy’s, which are now struggling — 20th-century malls grew rapidly, in part, because of government subsidies provided in the form of tax breaks. Smithsonian Magazine has explained that over the decades, real estate developers overshot their expectations, constructing increasing numbers of malls despite a lack of population growth. By 1999, the downward trend we see intensifying today had already begun:

Shopping centers that hadn’t been renovated in years began to show signs of wear and tear, and the middle-aged, middle-class shoppers that once flooded their shops began to disappear, turning the once sterile suburban shopping centers into perceived havens for crime. Increasingly rundown and redundant, malls started turning into ghost towns—first losing shoppers and then losing stores.

Almost twenty years later, the trend has only intensified, and retailers are evidently bracing for an even deeper plunge. As CNBC noted earlier this year:

At $12.7 billion, U.S. department store revenue is $7.2 billion lower than it was in 2001, according to the U.S. Census Bureau. Expect these trends to continue.”

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turnball the banker's picture
turnball the banker (not verified) Mar 23, 2017 5:58 PM

End is near when there is nothing left to syphon

GUS100CORRINA's picture

SEARS, MACYs, TARGET, etc., etc., etc.

Figures LIE and LIARS can FIGURE.

Luk 8:17

“For nothing is secret that will not be revealed, nor anything hidden that will not be known and come to light.

Luk 12:2

“For there is nothing covered that will not be revealed, nor hidden that will not be known.

BlindMonkey's picture

That is no apocalypse, that is the tools of genocide being destroyed.  Humanity is better for it.

kavlar's picture
kavlar (not verified) BlindMonkey Mar 23, 2017 6:53 PM

Karma's a biyatch when it takes the form of an apocalypse.

Mano-A-Mano's picture
Mano-A-Mano (not verified) kavlar Mar 23, 2017 6:54 PM

I'm SOuth of the border. Take that Apocalypse! Be watchin y'all trying to go South through Trump's wall .

Déjà view's picture

Mortgage$/Auto loan$ consuming much discretionary income...

Son of Loki's picture

8 years of Barrack bin Bama has consequences.

Squid Viscous's picture

meanwhile Panera and DOminos trade for 40x earnings.

folks still have money for shitty pizza and $9 sandwiches,?

scratching head...

peippe's picture

Dominos drove most decent mom&pop pizza parlors out, 

so now we get this tomato-stuffed crap....

make your own better if you can wait for yeast to rise twice.

junction's picture

All you need is a TARP program for student loans, where the Fed buys the $1.2 trillion of outstanding student loans and refinances them to a 0.5% interest rate with no late payment penalties for the first five years.  But the government can only bail out their bankster friends, Wall Street owns the government and the Rothschilds owns Wall Street.

Larry Dallas's picture

Of course when public transit put bus stops from the ghettos into these malls, they became materially less safe, and hence crime drove the middle class further away - and online.

i poop pink ice cream's picture

"End is near when there is nothing left to syphon"... from the working class to the financial elites.

armageddon addahere's picture

What happened to spending money you don't have on shit you don't need to impress people you don't like? Is the American Dream over?

turnball the banker's picture
turnball the banker (not verified) Mar 23, 2017 5:58 PM

End is near when there is nothing left to syphon

Secret Weapon's picture

We do not have the "fucking money" because we have to give it to the Feds and the health insurance companies. 

And stop calling it a recession.  It is a fucking depression and has been all along. 

just the tip's picture

Further, as longtime retail analyst Howard Davidowitz observed in 2014, “What’s going on is the customers don’t have the fucking money. That’s it. This isn’t rocket science.”

this fucking davidowitz guy is a man after my own fucking heart.  if you can't get your fucking mind around that, there is no amount of fucking decorum in any fucking forum that is going to fucking help you get it.

Rakksan's picture

Davidowitz is one of the few honest plain talkers left anywhere.

Ban KKiller's picture

Can I use my EBT card?

Bigly's picture

I thought i curtailed my spending. How come my Amex bill is seizure inducing... every month?


I guess i am still a 'consumer'.  :-(

biker's picture
biker (not verified) Mar 23, 2017 6:00 PM

Market cap is bullshit. There should be a market cap bullshit ratio to figure out the real medium.

hotrod's picture

What is the labor participation rate??????   Shit load not even in the work force anymore making money.

The only part of GDP I see growing is HEALTHCARE and that does not leave anybody with anything to spend.

illuminatus's picture

Time to fire up the helicopters, Mr. Yellen!

TheRideNeverEnds's picture

Bullish news that.

Less money losing stores means more money to buy back their shares.

Bonuses all around!

knukles's picture

As if this is not fake news.

mpcascio's picture

Tell it to Amazon.

serotonindumptruck's picture

Bezos ain't all that.

There's better deals to be had with this fake digital currency.

Just look around.

If it's all gonna crash and burn, why not get the best deal for your jewbucks?

Goldennutz's picture

Sears is dead will somebody please tell them. 

Winston Churchill's picture

Sssh ,there maybe some assets left unstripped.

biker's picture
biker (not verified) Mar 23, 2017 6:15 PM

ATA Chairman Kevin Burch, president, Jet Express
Jim Burg, president and CEO, James Burg Trucking
David Congdon, CEO, Old Dominion Freight Line
Mike Ducker, president and CEO, FedEx Freight
Eric Fuller, CEO, U.S. Xpress
Neal Kedzie, president, Wisconsin Motor Carriers Association
Rich McArdle, president, UPS Freight
Dennis Nash, CEO, Kenan Advantage Group
Tonn Ostergard, president and CEO, Crete Carrier Corp.
John Smith, chairman, CRST International

Getting shit done.

803Mastiff's picture

The broad economy is long dead. The signs of life are creditcialis postmortem erections. 

Winston Churchill's picture

Final bowel evacuation is imminent.

francissba's picture

Here's a weird thought.

If there's 23.5 sq ft of retail space per person in the US, that is a shitload of space.  

That per person space is around 3.5 by 7 feet, just about the size of a homeless shelter cot.   My guess is FEMA's space needs for all the homies they plan to hook up when the shit hits the fan is taken care of.  

I'm also very relieved to know that every American has a 3 hots and cots  

Wow  I am sooooo relieved.



coast1's picture

I have a 4k credit limit on amazon...I am going to buy more survival supplies and take it to 4k and default on it...what are they gonna do, send muslims after me? tap my phone and computer? spray chemtrails on me?  vaccine me? force GMO on me?  lie to me on tv?  etc

skinwalker's picture

Worse. They'll make you listen to Alexa reading the WaPoo aloud 23.5 hours per day.

Common_Cents22's picture

yep, if you. or a chunk of people decide one day, they have enough stuff, have enough cash/gold etc....   they can load up on credit and let it run to a default.   it wouldn't take that many more to do it to cause a major tsunami.

likewise in not paying taxes, a small critical mass would cause mass chaos with little retribution.

Mr. Class and Quality's picture

Been on life support for a while.

scintillator9's picture

It is also not a good sign when a moving company that has been around since 1950 is liquidating.


chosen's picture

Somebody needs to start a "Dead Malls" website.

chosen's picture

Thanks silverlok.  I liked the old site when all those banks were failing after 2008.

Sonny Brakes's picture

Retailers will have a difficult time making a profit on products their customers can no longer afford.

Berspankme's picture

Wife and I were talking last week. Haven't been in a mall in years

Rakksan's picture

I walk the mall every day and leave before the shops open.

Bigly's picture

I wonder if roller rinks in malls will make a come back...

The Harlequin's picture

Expect a surge in online vendors acquiring closedown products and end-of-line crapola to fill their inventory. This should last a few years, until the proverbial hits the whirling thingammy, by which time we will all be talking to little boxes in our homes for everything. In turn, we will then be providing all the stats for the algos which already run our lives, concentrating all power into the hands of the usual suspects. Resistance is not only futile, it serves the machine! The answer is to disconnect and get back to the garage, where making do is the mother of invention and simple human pride in our own resourcefulness!

Common_Cents22's picture

yep, i do a good business listing excess inventory online for businesses.  i do it on % split, they do all the ship/fulfill to get rid of their inventory.  tons of businesses have NO idea how to do simple online stores or list on amazon/ebay etc...


groupon deals....spams a crapton daily.

its insane the selection of goods we have here in the US.  astonishing and unsustainable.

SantaClaws's picture

The U.S. economy is going under.  Better start a war quickly.