A Jos store. A. Bank in San Francisco announces its final closure on August 6.
David Paul Morris / Bloomberg via Getty Images
While the pace of store closures has slowed from its 2019 high, don’t expect the respite to last long, new report from UBS suggests America still has way too much space. retail sales per capita.
At the end of last year, there were 115,000 malls – a figure that includes strip malls, malls, outlet stores, and other lifestyle centers – across the United States. , up from 112,000 in 2010 and 90,000 in 2000, according to UBS in an analysis using data from the International Council of Shopping Centers.
That works out to about 59 square feet of mall space per U.S. household, or just under 62 square feet in 2010, UBS said. But it’s still well above the 55 square feet of space per household in 2000 and 49 square feet in 1990, analysts Michael Lasser and Jay Sole explained.
UBS estimates that around 80,000 retail stores, or 9% of total stores, will close the country by 2026. This assumes that e-commerce sales will increase to 27% of total retail sales by then , compared to 18% today.
“A lasting legacy of the pandemic is that online penetration has increased dramatically,” Lasser said in a note to clients. “We expect it to continue to rise, which will lead to further rationalization of retail stores, especially as some of the government’s one-time support measures wane.”
Even as more and more Americans are ordering more and more of everything from milk and bread to office chairs to sneakers on the internet, store openings are overtaking closures for the first time in years. Many businesses are seizing the moment to take advantage of cheaper rents and ample vacant space to choose from. Much of the growth has come from retailers selling beauty, grocery and discount products, including Ulta, Dollar General, TJX and Lidl, which forecast a strong post-pandemic rebound in store visits.
US retailers have announced 3,169 store closings and 3,535 store openings so far this year, according to data collected by Coresight Research. The company tracked 9,832 closures in 2019 – the highest it has seen since starting to track this data. That figure fell to 8,741 in 2020.
UBS said the retail sector has been recently supported by government stimulus measures and by consumers shifting their dollars to goods from services, travel and other entertainment events being cut short due to the pandemic. . But he said these trends are going to be short-lived, leading to an expected slowdown in retail sales, which will lead to increased store closings.
UBS predicts that the greatest number of closures will occur at retailers that sell clothing and accessories in the years to come. The firm expects around 21,000 closures in this sector by 2026, with most of the closed stores located in closed shopping malls.
Closures are expected to be the smallest in home improvement, grocery and auto parts retailing, as these categories are less likely to be affected by the boom in e-commerce, UBS said .
– UKTN Michael Bloom contributed to this report.