۱- The economic impact of store closings

۲- Factors contributing to store closings

۳- Strategies to counteract store closings

۴- Summary and conclusion

References

Abstract

The recent wave of retail bankruptcies as well as poor sales performance has resulted in a large number of store closings. Low sales in store-based retailers can also be attributed to the rapid growth of web-based retailers (largely, Amazon) as well as an excess of store space per capita in the U.S. as compared to other developed nations. Strategies to stem the decline of retail stores include: (1) utilizing omnichannel-based synergies among channels and devices to increase store sales; (2) making stores more attractive and engaging through personalization, interactivity, and a constantly changing environment; and (3) improving productivity through introducing small-size store formats and downsizing existing stores.

The economic impact of store closings

Troubles are plentiful in retailing as measured by recent filings for bankruptcy (e.g., Toys “R” Us, Claire’s, Sports Authority, Payless ShoeSource, BCBG Max Azria, American Apparel, H.H. Gregg, Gordmans, Gander Mountain, Pacific Sunwear, rue21, The Limited, Aéropostale, Bebe, Quiksilver), as well as announcements of store closings due to underperformance (e.g., J.C. Penney, Macy’s, and Sears each announcing that they will close over 100 retail stores). Cavan (2016, p. 353) said that “store closures are a widespread phenomenon, leaving no corner of the nation unscathed” and predicted a loss of 175 million square feet of retail space due to store closings in 2016. Another author used the terms apocalypse, meltdown, and disaster to describe the state of the retail industry (Conick, 2017). Not all retailers will be equally affected by store closings. A recent study by Deloitte classified retailers into three categories: price-based, balanced, and premier.