The economy may chugging along but the retail sector is falling behind.
As of April, 2019 has seen more store closings (or announcements of store closings) than all of 2018. According to Coresight Research as reported in the New York Times, there have already been 5,994 store closings by April, exceeding the 5,854 stores that closed in all of 2018. The good news: we still have a ways to go to reach 2017’s record of store closings of more than 8,000.
There is one bright spot: the number of discount or dollar stores is booming because they are less susceptible than other retailers to e-commerce. (On a recent college tour in upstate New York, one of our team members saw plenty of dollar stores in some of the more rural areas.)
But total store openings are stalled. There have been 2,641 store openings announced compared with 3,239 openings last year.
As an agency, we don’t handle retail clients — although the head of the agency spent several years supporting a provider of retail technology — so you may wonder why we’re so focused on retail.
We think it’s the canary of the economy. There’s clearly a shift in how people shop and purchase, and often it’s away from bricks-and-mortar stores even as once web-only retailers like Amazon or Warby Parker now open retail locations.
But the trend seems to be more store closings, which leads to shrinking local ad revenues (because shuttered retailers don’t take out ads to promote sales), which hurts journalism. In rural area, there’s been a decline in local news coverage, according to the Pew Research Center. That’s a real problem because that kind of local coverage is unlikely to return.
Behind the somewhat self-interest in the state of journalism, shuttered retail locations means fewer people working, and a potentially emptying out of main street stores and nearby malls. You can see the negative impact even in places like Manhattan’s SoHo district, and it makes a difference, not only affecting real estate but communities beyond. A Bloomberg Businessweek article a while back depicted the problems faced by some towns in the UK, where retailers had left, which meant residents had to travel twice as far to buy things. Which meant that new residents are less likely to move there. And that could cause a further spiraling effect.
None of which is good.
We don’t have a solution, and we’re not suggesting drastic measures to curtail Amazon and others’ market power.
We just think it’s an important issue, and one we’ve been regularly mentioning in this blog for the past several years. We also discuss other topics that impact journalism and PR.
, death of retail
, local news
, Pew Research Center