Although the first set of sales figures for the holiday shopping season seem bright and full of cheer for retailers, 2017 has been the industry’s toughest year yet.
The traditional brick and mortar retail industry enjoyed a strong end to a terrible year, but will it be enough to stave of the closing of stores that were close to the edge.
Most experts say no.
Shoppers have shown they want to increase what they purchase online and with their mobile handsets. In 2017, Amazon stock has increased 55%, which is one signal what consumers want.
Experts say that 2018 could add to the woes of the traditional retailer and give them more of what they suffered with in 2017.
Store closings more than tripled during 2017 to over 7,000 according to a global retail research firm. Thus far with just four days remaining in 2017, bankruptcy filings across the retail sector reached 662, shows data from bankruptcydata.com. That figure is 30% higher than for the same period one year ago.
While many stores that filed were small businesses, major retailers are also on that list, including well-known names such as Gymboree, Rue21, Payless Shoes and Toys R Us. Those chains remain open, but others such as The Limited and Sports Authority are shuttered, and RadioShack closed nearly all its stores during a second filing of bankruptcy.
During a time when close to 2 million workers were hired and the unemployment rate dropped to a low of 17 years, retail lost jobs, as overall for the year 36,000 jobs were cut. Only telecommunications took more job cuts than did retail.
For some, the year was not equal to an apocalypse, but rather an evolution. Retail experts say that there will always be winners and losers in retail and the industry maintains in somewhat of a state of flux always. One expert calls the demise of the retail sector overblown.
Even though stores have been shuttered and traffic has dropped in shopping malls, the nation’s malls remain at about 93% occupancy, and the number of enclosed malls remained stable, even with high-profile store chains liked J.C. Penney, Macy’s and Sears having closed many of their mall anchor locations.
While store opening announcements have gone up in comparison to 2016, they total just 3,433, which is less than half of the overall closing announcements. In addition, the majority of store opening announcements were by discount retailers Dollar General and Dollar Tree.