Visualizing America's Retail Apocalypse

Tyler Durden's picture

The steady rise of online retail sales should have surprised no one. As Visual Capitalist's Jeff Desjardins notes, back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each and every year since then, even through the Great Recession. By 2009, e-commerce made up about 4.0% of total retail sales, and today the latest number we have is 8.3%.

Here’s another knowledge bomb: it’s going to keep growing for the foreseeable future. Huge surprise, right?

Courtesy of: Visual Capitalist

 

SIGNS OF A RECKONING

Retailers eye their competition relentlessly, and the sector also has notoriously thin margins.

The big retailers must have seen the “retail apocalypse” coming. The question is: what did they do about it?

Well, companies like Sears failed the shift to digital altogether – in fact, it is even widely speculated that the former behemoth might file for bankruptcy later this year.

The majority of other companies, on the other hand, are trying to combine “clicks and bricks” into a cohesive strategy. This sounds good in theory, but for established and sprawling brick and mortar retailers with excessive overhead costs, such tactics may not be enough to ward off this powerful secular trend. Target, for example, has had impressive growth in online sales, but they still only make up just 5% of total sales. As a result, the company’s robustness is also in doubt.

Wal-Mart took another route, which could potentially be the smartest one. The company hedged their bets by buying Jet.com, which was one of the fastest growing online retailers at the time. Later, they followed up by buying an online shoe retailer to help fill a perceived gap in footwear. Recent reports have surfaced, saying that these acquisitions are leading to staff shakeups, as the company re-orients its focus.

After all, going online is not just a tactic to boost sales in the new era of retailing. It has to be a mindset, and one that is central to the company’s strategy. Hopefully Wal-mart gets that, otherwise they will also be in trouble as well.

APOCALYPSE NOW

In the midst of all of this is what is described as the “retail apocalypse”.

There are two main metrics that are pretty black and white:

Number of Bankruptcies: We’re not even one-third through 2017, and we already have about as many retail bankruptcies as the previous year’s total. If they continue at the current pace, we could see over 50 retailers bankrupt by the end of the year.

Number of Store Closings: So far we’ve seen roughly 3,000 store closings announced in 2017, and Credit Suisse estimates that could hit 8,600 by the end of the year. That would easily surpass 2008’s total, which was 6,200 closings, to be the worst year in recent memory.

Here’s some of the companies that have already filed for bankruptcy:

  • Gordmans Stores
  • Gander Mountain
  • Radioshack (again)
  • HHGregg
  • BCBG Max Azria
  • Eastern Outfitters
  • Wet Seal
  • The Limited
  • Vanity Shop of Grand Forks
  • Payless Inc.
  • MC Sports

And here are the store closings occurring as a result of the retail apocalypse:

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I am Jobe's picture

And many more to go . Just pretending for now. However there are plenty of fast food joints to make up the losses as Americans stuff their faces 

D Nyle's picture

When Pawn Shops, Gun stores and Fast food go online only, is when I worry

JackT's picture

Last chart is wrong. Gander mountain is closing all 126 stores (not just 30)

http://www.wsls.com/news/gander-mountain-files-bankruptcy-closing-all-lo...

They have been in business over 50 years, many of these retailers have been around awhile...that's what concerns me. What the hell is coming our way?

Shocker's picture

Now add Gander Mountain to that list.. it keeps going. Its been a tough start to 2017

Layoff / Closing List: http://www.dailyjobcuts.com

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yogibear's picture

Government solution has been more H1bs.

Send the whole indian population to replace Americans.

philipat's picture

Officially, this is dismissed as simply a move to "the convenience of online shopping". That is certainly a part of it but not the whole story; and the numbers actually confirm that. The ONLY way you stop an American from shopping (The National sport) is to cut off or max out all sources of additional credit. The simple fact is, Americans are broke...

And remember that 70% of US GDP is derived from consumer consumption (PCE). Hmmmm.......I'm just guessing here but maybe that also accounts for the huge slowdown in GDP growth? Nah, must be something else....

The other Unicorn that needs explaining is with restaurants also closing all over and with the lack of money, where the fuck are all these new "Bartenders and Waiters" jobs coming from? I'll take Lies, damned lies and statistics for $200 please Alex...

stizazz's picture

Too many malls, too few jobs.

moimeme's picture

We need the mom and pop stores back.

Big corporations are too top-heavy to maintain profit.

limpinalien69's picture

Electronic commerce. It's simple.

9Ball's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

HowdyDoody's picture

Bezos plan is working. Just a few more years then it is retail monopoly time. Watch those prices rise!

cheka's picture

autos leading the charge down

 

https://consumerist.com/2017/04/14/retail-continues-to-suffer-as-sales-decline-for-second-month-in-a-row/

 

For the first time in nearly two years, retail sales declined two months in a row, highlighting once again the current challenges facing a retail industry that has suffered a number of bankruptcies and store closures so far in 2017.  

Sales in March decreased 0.2% at U.S. stores, restaurants, and online retailers from their level in February, according to figures [PDF] released by the Commerce Department on Friday.

In all, the Bureau estimated advanced monthly sales of $470.8 billion for March, a decrease of about $1 billion from February’s sales of $471.8 billion.

The largest decrease in sales came in the auto retail sector, with dealers and parts companies lowering sales 1.2% from $96 billion in sales in February to $95 billion in March.

The food services and drinking places also saw a decrease of 0.2% (or about $300 million) from February to March

jeff montanye's picture

well, the closed malls' parking lots give us somewhere to store the unsold cars.

RiverRoad's picture

And a place to park a van and sleep for the night...   Sad.

max2205's picture

Long uPS and cardboard boxes 

Let it Go's picture

I agree, small family owned stores serve the community in ways the big retailers never will. When it comes to Amazon I am not a fan. Because of how it disrupts local economies I strongly urge people to consider what kind of community and society they want in coming years before jumping on the Amazon bandwagon.

Amazon excels in creating illusions that fail to hold up under scrutiny. For all the praise many people and politicians heap upon small business they are often quick to cut the very throat of the creator of much of our wealth and jobs. In the article below are fifteen reasons why Amazon is not the answer to a better future for America.

http://brucewilds.blogspot.com/2017/04/amazon-is-not-answer-to-creating-better.html

RiverRoad's picture

After N. Korea nukes Amazon in Seattle the mom and pops will be back.

zippedydoodah's picture

Every non-food retailer in the US could close but employment demand for bartenders and waiters is infinite so unemployment wouldn't rise. The BLS statistics prove that this is true every month. USA! USA! USA!

XlibertyX's picture

This is bullcrap. If bluster were nukes, Kim Jong-Un would have thousands but he has none!

Took Red Pill's picture

Exactly! Small businesses are the best for the people.

" It has to be a mindset, and one that is central to the company’s strategy. Hopefully Wal-mart gets that, otherwise they will also be in trouble as well."

Hopefully Walmart gets it? Who gives a shit about Walmart? They've destroyed family businesses.

RiverRoad's picture

Gonna be lots of "delivery boy" jobs out there.....

SoDamnMad's picture

Sure, can you imagine seeing 100 people squatting and taking a sh_t on 5th Ave. in NYC.

JackT's picture

That's good. Hopefully Mr. Lemonis can make something of what he acquired.

GooseShtepping Moron's picture

I fucking hate Gander Mountain. One of the worst customer service experiences I ever had.

LetThemEatRand's picture

You may fucking hate Gander Mountain, but Broke Gander Mountain will try to fuck you.

yogibear's picture

BULLISH, BUY STOCKS....

BTFD, Rinse and repeat for this rigged market.

RiverRoad's picture

Fake money.  Fake markets.  Fake news.  Real mess.

Dubaibanker's picture

Back in Sept 2015, I predicted all of this to occur. Things are rapidly getting worse than ever! There is abosutely no recourse to what's occuring.

Count your blessings!

We are in a death spiral and it won't end pretty. Think of Venezuela, Ukraine, Zimbabwe.....even Somalia, Sudan and Yemen. This is how the world will be in 5-10 years from now especially in the West.

Chaos, lack of food, security issues, deaths, riots, deflation. While, whatever countries are self-sufficient and insulated from the rest of the world (as much as is possible) like China, Iran , Russia, Philippines etc will do well (and not sink).

Because insulated countries do not have Citibanks, Hiltons, dependency on Boeing and Microsofts, Mastercards or GM so they will do just fine!

Rest of them will sink like the Titanic but ever so gradually.....

Demand destruction is causing permanent declines in unemployment, businesses, demand etc while changing society permanently for the worse.
jeff montanye's picture

deflation?  are you serious?  do you see acres of cars stored at malls in this future?  lack of food will bring deflation?

as i remember it zimbabwe had a spot of inflation, venezuela too.

RiverRoad's picture

An article on ZH the other day said grocery prices are actually falling due to increased competition.  Keeps the bread and circuses going.

Dubaibanker's picture

Inflation will be there but the producer gets lowest price as in farming.

Deflation is another sense of second hand car prices. homes plunging, price of computers, lack of business leading to closures and unemployment....that's classic deflation spiral with no bottom. It works only in the individual sense. For example, a company before shutting or going bankrupt will sell at any price. 

Overall, society may not see it as such but company will collapse because of demand destruction and more price swings downward.

Tell me what's the price of a home in Ukraine or Zimbabwe? Would you buy for $100 or $1,000? Thats deflation for you.

Cars stored in malls show me only one thing: price going downwards which in a word is deflation!

 

Jubal Early's picture

I agree.  Some guy up above wrote:

"that's what concerns me. What the hell is coming our way?"

 Why white genocide.  South Africa is coming to a city near you.

j0nx's picture

Wrong. Nothing will happen. The algos and pols are firmly in control.

stitch-rock's picture

Wouldn't this phrase "permanent declines in unemployment" mean
the opposite of what was intended? Maybe can get rid of the 'un'....

StagStopa's picture

I'm delighted to see those cocksuckers at #Radioshack go. Worked for them in the 90s as a store manager. What a fucked up, short sighted, stupid outfit. Fucking shitheads. Cut their own throats. Totally deserved.

Walmart is next. They're desperately flailing around, buying shit, money losing internet companies to gain some kinda traction. All while they let their stores run down, cutting staff, leaving $1000s of dollars on the table simply by not having enough staff to pick it up.

Their vaunted resupply chain a total mess. Buying tons of shit nobody wants while quick easy to sell product is out.

These fucks are next, guaranteed.

Roxi

CheapBastard's picture
"Anyone who says economy declining is lying"

~ Osama bin Bama

 

Obama says the United States has the 'strongest, most durable economy in the world' during his remarks in his final State of the Union Address.

http://www.cnn.com/videos/politics/2016/01/13/state-of-the-union-address...

peopledontwanttruth's picture

Only said because the TelePrompTer said it. He wouldn't know economics if it fell from heaven and hit him in the head.

rejected's picture

How would you ship a weapon you purchased online without a local firearms dealer nearby?

peippe's picture

The best gun stores are online.

As long as you are already familiar with the weapon you are shopping for.

D Nyle's picture

Now I'm Triggered  /s, I guess Craiglist is a Pawn shop, so all thats left is Fast Food