The Washington Post has a story about how, after years during which bricks-and-mortar retailers have been hurt by changing shopping habits despite the growing economy, many retailers may find it even tougher to survive a recession.
According to the story, “Analysts say another reckoning might be in store as a slowing global economy, volatile stock market and new tariffs are likely to take their toll on American consumers in coming months. There is little middle ground left in the retail industry: Companies are either doing brisk business or struggling to hang on, analysts say — a trend that is likely to become even more pronounced if the economy sours.”
The Post notes that while “Walmart, Target and Lowe’s all posted better-than-expected profits in the past week, boosting shares of their stock and reassuring investors that U.S. consumers are still opening their wallets,” the same cannot be said of department stores and apparel retailers like Macy’s and JC Penney. At the same time, Barney’s has filed for bankruptcy, and even Nordstrom - which seemed to be making smart moves - has struggled.
The cold reality: “So far this year, retailers have announced the closures of more than 7,500 stores, according to data from Coresight Research. By comparison, 5,500 stores were shuttered in all of 2018. A number of national chains, including Payless ShoeSource, Gymboree and Things Remembered, have also filed for bankruptcy protection citing declining sales and mounting debt.”
According to the story, “Analysts say another reckoning might be in store as a slowing global economy, volatile stock market and new tariffs are likely to take their toll on American consumers in coming months. There is little middle ground left in the retail industry: Companies are either doing brisk business or struggling to hang on, analysts say — a trend that is likely to become even more pronounced if the economy sours.”
The Post notes that while “Walmart, Target and Lowe’s all posted better-than-expected profits in the past week, boosting shares of their stock and reassuring investors that U.S. consumers are still opening their wallets,” the same cannot be said of department stores and apparel retailers like Macy’s and JC Penney. At the same time, Barney’s has filed for bankruptcy, and even Nordstrom - which seemed to be making smart moves - has struggled.
The cold reality: “So far this year, retailers have announced the closures of more than 7,500 stores, according to data from Coresight Research. By comparison, 5,500 stores were shuttered in all of 2018. A number of national chains, including Payless ShoeSource, Gymboree and Things Remembered, have also filed for bankruptcy protection citing declining sales and mounting debt.”
- KC's View:
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The only thing I want to add to this story is that it is not “if the economy sours.” It is when “the economy sours.” That’s not politics. It is economics. And maybe gravity.
Inevitability is exactly that. The retailers that survive will be the ones that innovate constantly, build consumer ecosystems, and do things like what Longo’s is doing in Toronto.
