Coresight Research predicts a significant increase in store closures this year, surpassing the numbers seen during the pandemic. Factors driving this trend include waning consumer spending, heightened competition from online giants like Amazon and Walmart, and a shift towards smaller, more efficient retail locations.
If Coresight’s forecast holds true, store closures this year will exceed 2020, when the pandemic shut down businesses nationwide.Store closures were actually down in the aftermath of the pandemic.
But as the spending boom waned, some retailers saw problems with their businesses come home to roost.“I do think we're going to see more stores closed this year than what we saw last year,” Svec said.That’s a big number, he said. But it’s clear we’re seeing an increase in “the natural cleansing away of underperformers” both in terms of companies and store locations, he said.Svec said retailers are facing greater competition from the biggest companies, particularly Amazon and Walmart, as well as low-price Asian importers Shein and Temu.“Housing goods, home furnishings, all of those segments have really suffered, as we would expect with a housing market that is as dormant as the one is today,” Svec said.
“Omnichannel” retail means a seamless blend of online and brick-and-mortar shopping. Physical locations are still important for a lot of retailers, but they no longer need as much space or to carry as much inventory in each location.
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