Store openings/Store closings 2017 insights are from the Fung Global Retail & Technology weekly tracker report. Visit their site and learn more here.
2017: The Retail Max Exodus
We’re not even halfway through 2017, but many retailers have already had a pretty lackluster start to the year (to say the very least). It seems like every week we’re hit with another headline about a major retail chain closing doors around the country. And it turns out, this observation isn’t really too far off. The latest weekly tracking report from Fung Global Retail & Technology provided many interesting insights into the startling number of store closings, how the number compares to years past, as well as a few reasons why this is becoming the new normal.
Highlights from the Fung Global Retail & Technology report:
- Sephora has announced plans to open 70 new in-store-stores inside JC Penney locations. That would bring them to 650 store locations at the end of 2017.
- Bebe has confirmed it is closing all 170 of its retail stores (that includes all retail and outlet stores). Teen retail chain Rue21 is closing over 400 poorly performing locations.
- Dollar General announced the expansion of 1000 new store locations.
- As of now in 2017, 3,296 stores have announced closings over the past year. That’s almost twice as many for the same time period last year and more than the average in the past 10 years.
- There have been 2,553 announced store openings, which is on the other hand, only a 19% increase year over year.
- Value-driven retail concepts, such as fast fashion like H&M, are outperforming the market. Other well-performing categories are beauty and athleisure.
Here are some notable store openings and store closings 2017:
What’s going on?
Fung Global Retail & Technology identified several reasons for the major jump in store closings over the past year:
- Declining mall traffic.
- Reconfiguration of stores as retailers shift online.
- Cutting major losses from stores that are unprofitable.
What can retailers do? Get connected, stay relevant.
Brokerage firm Credit Suisse said in a research report released in April that it’s possible more than 8,600 brick-and-mortar stores will close their doors in 2017. And according to NPR, almost 90,000 retail workers have lost their jobs since October. But just because giant stores are shutting their doors indefinitely doesn’t mean smaller retailers are doomed. What it does mean, however, is that shopping is continuing to evolve past just the in-store, mega-mall experience. We have enough data these days to confirm the notion that this shift to online selling is going to stick around. Wise retailers will consider both the online and in-store experience for their shoppers. Then they’ll learn how to merge those two worlds into a successful, seamless retail business.