DESIGN/CONSTRUCTION

Report debunks retail apocalypse: More stores opening than closing

BY Marianne Wilson

Don't believe the hype — physical retail is still growing, particularly in three key segments.

Retailers are opening 4,080 more stores in 2017 than they are closing, according to a new research report from IHL Group, and they plan to open over 5,500 more in 2018. Mass-merchandisers, including off-pricers and value chains, are the fastest-growing retail segment (+1,905 stores), followed by convenience stores (+1,700 stores) and grocery retailers (+674 stores).

The research for the report, “Debunking the Retail Apocalypse,” reviewed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail vertical segments. It found that for every chain with a net closing of stores, 2.7 companies showed a net increase in store locations for 2017.

In one of the report's most interesting findings, just 16 chains account for 48.5% of the total number of stores closing. And five of these 16 retailers (RadioShack, Payless ShoeSource, Rue21, Ascena Retail and Sears Holdings) represent 28.1% of the total closings.

"The negative narrative that has been out there about the death of retail is patently false,” said Greg Buzek, president of IHL Group. “The so-called ‘retail apocalypse’ makes for a great headline, but it’s simply not true. Over 4,000 more stores are opening than closing among big chains, and when smaller retailers are included, the net gain is well over 10,000 new stores."

Highlights of the research include:

The total net increase of stores for 2017 is 4,080, including retail and restaurants. Core retail segments will see a net gain of 1,326 stores, while table-service and fast-food restaurants are adding a net of 2,754 locations. In total, chains are opening a net 14,239 stores and closing 10,123 stores.

42% of retailers have a net increase in stores, only 15% have a net decrease, and 43% report no change.

Specialty apparel retailers are seeing the largest number of closings, with a net loss of 3,137 stores. Yet, for every chain closing stores, 1.3 chains are opening new stores.

“Without question, retail is undergoing some fundamental changes. The days of ‘build it and they will come’ are over,” added Buzek. “However, retailers that are focusing on the customer experience, investing in better training of associates and integrating IT systems across channels will continue to succeed.”

"Debunking the Retail Apocalypse" was underwritten by AT&T, Cayan, Fujitsu, Aptos, Level 10, Adspace, and Veras Retail. The research is available at ihlservices.com.

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R.Bowers says:
Sep-07-2017 03:29 pm

Amen Chuck!
The Hype is, most times wrong, or at least, not the whole story! As your insights and experience have shown us the Retail Industry is an Industry that is tied to the Consumer! We reflect the Needs, Interests, and Trends our Consumers are following and will be wanting! Retail is a reflection of the consumer's dynamic Interests. Those that listen and respond with insight and experience that is founded in Consumer Experience will live to grow, those doing the same thing again and again and think it will still work are left to a spiraling demise! Well said, Chuck!!

S.Raisch says:
Aug-31-2017 02:52 pm

Bunk the Bunk
This article needs to be debunked - talk about a misleading headline. You never make yourself look smart by trying to make others look dumb. But this article will nevertheless be mindlessly spread as being news - it is as fake news as any other. This part is right: “Without question, retail is undergoing some fundamental changes. The days of ‘build it and they will come’ are over,” added Buzek. “However, retailers that are focusing on the customer experience, investing in better training of associates and integrating IT systems across channels will continue to succeed.” The rest is misleading. Like Mark Twain said, 'There are three kinds of lies, lies, damn lies, and statistics." The key fact is right there but they choose to ignore it. Restaurants are technically retail, but are not stores. Core retail segments will see a net gain of only 1,326 stores, while table-service and fast-food restaurants are adding a net of 2,754 locations. Specialty apparel alone closed 3,137 - SO FAR. 67.5% are restaurants. Only 32.5% are core retail. Retailers are scurrying to survive, playing the deadly game of opening stores to create volume, while same store sales struggle (which is why they are closing stores at the same time as opening new one). - Fastest growth is in new retail concepts and expansions that are disruptive to others. Aldi's announcement of adding 750 stores is an example of this (and beginning home delivery). A large part of the net gain will be dollar store format, hardly a core retail experience. - The net growth game is an old game coming back to life. It is a veil disguising problem and issues from owners and investors. It allows them to remove the worst underperforming locations, and when also adding new stores still pull out revenue and sales growth. But it doesn't solve the underlying problems. -Many of the new stores are leveraging Omnichannel opportunities. Aldi's is one. Home Depot and Lowe's are also doing this in all their stores and it is the plan in the new locations. - Most chains have not saturated the entire country, having opportunities to open stores in new markets, even thought they will also suffer in those areas. Read deeper and see what else you see.

R.Brittain says:
Aug-31-2017 12:02 pm

Spin, spin, spin. The biggest
Spin, spin, spin. The biggest growth segment includes off-price stores of various kinds, itself a sign that the retail apocalypse is growing. It will only get worse once Sears & Kmart finally go belly-up.

M.Brandley says:
Aug-31-2017 10:50 am

retail closings
this story is full of b s. Many more retailers are going under this year. Supermarkets are down sizing. many more mom and pop stores are closing , dining establishments are closing from chains to local to mom and pop. Seems the writer of the article left this importand facts out.

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FINANCE

Nordstrom execs point out risks of going private

BY CSA STAFF

Going private may take some pressure off a company, but it is not without its risks.

In June, the Nordstrom family, which owns 31.2% of the department store's stock, announced it planned to explore taking the company private. But in its latest quarterly filing with the Securities and Exchange Commission, Nordstrom executives warned of the potential risks that might come with a move, reported Puget Sound Business Journal.

"The exploration of a possible 'going private transaction' by the Nordstrom family could impact our relationships with our customers, employees, suppliers and partners, operating results and business," the company wrote.

In the filing, Nordstrom said the family has not yet made a proposal to take the company private and never do so. But it said speculation about the possibility and "uncertainties related to our future could cause our stock price to fluctuate significantly," according to the report.

To read more, click here.

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ECOMMERCE

Walmart takes its marketplace north of the border

BY Deena M. Amato-McCoy

Walmart is expanding its online breadth in Canada.

The discount giant expanded its global online marketplace to its Canadian e-commerce store, Walmart.ca, a move that doubles the site’s online product assortment. The retailer expects this number to quadruple by the end of this year, according to Walmart.

Through the expansion, Canadian shoppers now have access to 27 third-party sellers, ranging from outside brands to small businesses that feature merchandise across the home, baby, apparel, toys, and sporting goods categories. Walmart selected each seller based on their online reputation and customer service, as well as their ability to satisfy its Canadian customers’ demand for a broader selection of quality products.

“Our goal is simple – to make shopping easier and more convenient for our customers,” said Rick Neuman, executive VP, technology & e-commerce, Walmart Canada. “The expansion through the Walmart.ca marketplace allows us to rapidly grow our product assortment through sellers we’ve chosen specifically to address the needs of our customers.”

Walmart Canada will continue to invite other sellers to join the site in the coming months, according to the retailer.

The move takes a jab at its rival, Amazon. While the online giant continues to expand its physical presence— especially through its recent acquisition of Whole Foods Market — Walmart is fighting back with its own strategic acquisitions that continue to bolster its digital reach and online product assortment. For example, the retailer acquired jet.com in September, followed by Shoebuy in December. In February, it acquired outdoor apparel retailer Moosejaw, followed by ModCloth in March. Earlier in June, the chain announced it would purchase Bonobos for $310 million in cash.

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