US Store Closures 2019 Outlook: No Light at the End of the Tunnel
Coresight Research tracked 5,524 U.S. store-closure announcements in 2018. While this figure was down 32% from the prior year, the number of store closure announcements so far in 2019 is up 23% versus this time last year, with potentially many more on the way due to companies currently in the bankruptcy process and more on the horizon. This report analyzes drivers of store closures, including the following factors:
- E-commerce continues its relentless share gains in retail, and market forecasts call for this rate to accelerate.
- Consumer retail spending remains at a high rate, so spending can only decrease from “peak retail.”
- Retailers in the U.S. continue to open stores at a rapid pace despite flattish store-based retail sales per capita.
- Interest rates continue to rise in the U.S., putting increasing pressure on retailers with high debt loads.
- Retail bankruptcies continue at a rapid pace, with the number of filings in the first six weeks of 2019 already at one-third of last year’s total.