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.

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?

Mustafa Kemal's picture

Gunbrokers.com is online

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

new game's picture

jimmy johns? order online and a shit sandwich sooooon. lol

Placerville's picture

I've seen pawn shops selling on ebay and you can order fast food online for pickup and delivery.

Arnold's picture

Dominoes.
Unreal Pizza.

peopledontwanttruth's picture

Online has had an impact but the bottom line these stores are going belly up is the American consumer is completely broke. Just look how many girl teen stories have no more shoppers. It's either eat with a roof over your head or an outfit for the princess at $150-200. Americans have reaped what they've sown.

swmnguy's picture

Also, look at these companies that are folding.  They have been run like shit, by looters, for decades.  

Radio Shack?  I worked on one of their annual meetings almost 20 years ago.  They hired a guy to write a song about how wonderful their CEO, Len Roberts was.  Len loved to play favorites among his top subordinates, and keep them at each others' throats.  Len had his "Golden Boy" and head of marketing, Dave Edmondson.  That guy was an obvious con-man.  You just felt greasy talking to the guy.  In due time Edmondson succeded Len as CEO, when Len was raptured up to Chairman of the Board.  Then it was discovered all of Dave's resume was made-up lies, as one would expect from an obvious con-man.  So, did these palace conspirators have time to run a consumer electronics and parts store?  Nope.

How 'bout Sears?  Eddie Lampert, hedge fund dude, has been extracting capital from Sears for decades.  Hey, guess what, they haven't bothered to figure out how to run the company that invented catalogue sales, which is really all the Internet is.  

Penney's?  If you can't figure out how to sell mid-market clothes to mid-market America, you should go out of business.  Laugh it up over their catalogue images from the 1970s, but they sold what people wanted to buy.

The Limited?  Lots of people don't want to spend $75 on a pair of off-brand khakis.

Who buys shoes and  clothes online?  Idiots, maybe.  How do you know they're going to fit, or be made out of decent fabric and materials, or be cut right, if you aren't there to try them on?  Online sales isn't their problem.  Their problem is horseshit short-term greed-crazed management, executives and board, looting the companies and not bothering to run the businesses.  Guess what, do a terrible job running a business and pretty soon you won't have one, unless you're an insider crony and can get a bailout like GM or the healthcare finance sector.

Good riddance.

scintillator9's picture

Even some Pawn shops have gone bankrupt lately, too:

http://www.twincities.com/2017/04/14/pawn-america-files-for-bankruptcy/

Pawn America, the largest pawnbroker in the upper Midwest, has filed for Chapter 11 bankruptcy, which it says is part of a reorganization plan.

swmnguy's picture

How the bleep does a pawnshop run out of money?  About the way you'd expect, actually.  Not through the running of the business itself.  By borrowing lots of money to open up new stores in areas that are unlikely to support a pawnshop anyway.  And lots of advertising in local markets, featuring oneself.

In short, the same way all these other companies are running themselves out of business.  Putrid management, too full of themselves and short-term greedy to bother with actually running their businesses, coing everything but the nuts and bolts things that have to be done but which aren't hip and cool and groovy and satisfying to sociopathic showoffs. 

Cassandra.Hermes's picture

Fast food is online for long time you can order your burgers with few clicks, but the fast delivery is not making it cheaper,

garypaul's picture

O.K., do not take this article at face-value. There are some obvious potential flaws that need to be addressed.

To set the tone, here is a quote by Danny Devito in the movie 'Other People's Money':   "The fastest way to go bankrupt is to be taking an ever larger share of a shrinking market".

Not that I'm claiming that, just that it's something to think about. Yes E-commerce is up to almost ten percent, but there is no guarantee that it will keep rising. And like I said, the total retail size seems to be shrinking.

junction's picture

At what point will the Congress in Washington, D.C. realize this country is heading deeper into economic disaster, past the point of no economic return?  The answer is never, not when Nancy Pelosi gamed her seat in Congress for acquiring some $150 million nor when the Clintons control near half a billion dollars in wealth acquired from looting the Clinton Global Initiative.  These are Democrats, mind you, supposedly a bulwark against the party of the rich, the Republicans. 

Chain stores that have been in business for decades shutting down because their primary customer base, the American middle class, has been decimated by ZIRP and the off-shoring of jobs. And you can toss in those people who got hooked on drugs shipped in by the Bush-Clinton-Obama drug peddlers using the resources of the U.S. Air Force, the DEA and local law enforcement.  All with government employees on the take for helping the lowest of the low, drug dealers.  Those other drug dealers you read about getting arrested, they are outsiders not under the control of the Bush Crime Cartel, the largest drug dealing organization in world history.  The United States is in big trouble.

HenryHall's picture

>> At what point will the Congress in Washington, D.C. realize this country is heading deeper into economic disaster, past the point of no economic return?

When people worldwide decide that in preference to holding US dollars they would rather hold something else of value. Anything else of sustainable value actually.

They won't realize until then - as it hits them in the face. First person to panic does fine. Last person to panic is totally screwed.

Intelligence_Insulter's picture

Corporate america needs to wise up and close down retail operations in high nigger demographic areas. 

Kprime's picture

but but, black retail theft matters too!

j0nx's picture

No, what they need to do is stop catering to the whines and screams of 1% of the population at the expense of normal people who don't want to shit with a dude who thinks he is a woman or listening to some holier than thou Kellogg's or Starbucks execs insinuate that conservatives are evil. Until corps get their stupid ass corporate execs and marketing teams out of politics then shit is only going to get worse for them. They will claim right up until they close their doors that this had nothing to do with it but we the people know differently.