Skip to comments.Retail Apocalypse: 2016 Brings Empty Shelves And Store Closings All Across America
Posted on 02/01/2016 8:58:20 AM PST by SeekAndFind
Major retailers in the United States are shutting down hundreds of stores, and shoppers are reporting alarmingly bare shelves in many retail locations that are still open all over the country. It appears that the retail apocalypse that made so many headlines in 2015 has gone to an entirely new level as we enter 2016. As economic activity slows down and Internet retailers capture more of the market, brick and mortar retailers are cutting their losses. This is especially true in areas that are on the lower portion of the income scale. In impoverished urban centers all over the nation, it is not uncommon to find entire malls that have now been completely abandoned. It has been estimated that there is about a billion square feet of retail space sitting empty in this country, and this crisis is only going to get worse as the retail apocalypse accelerates.
We always get a wave of store closings after the holiday shopping season, but this year has been particularly active. The following are just a few of the big retailers that have already made major announcements…
-Wal-Mart is closing 269 stores, including 154 inside the United States.
-K-Mart is closing down more than two dozen stores over the next several months.
-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.
-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.
-The Gap is in the process of closing 175 stores in North America.
-Aeropostale is in the process of closing 84 stores all across America.
-Finish Line has announced that 150 stores will be shutting down over the next few years.
-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.
But these store closings are only part of the story.
All over the country, shoppers are noticing bare shelves and alarmingly low inventory levels. This is happening even at the largest and most prominent retailers.
I want to share with you an excerpt from a recent article by Jeremiah Johnson. The anecdotes that he shares definitely set off alarm bells with me. Read them for yourself and see what you think…
I came across two excellent comments upon Steve Quayle's website that bear reading, as these are two people with experience in retail marketing, inventory, ordering, and purchases. Take a look at these:
#1 (From DJ, January 24, 2016)
[Regarding the] alerts about the current state of the RR industry. This is in line with what I've been noticing as I visited our local/regional grocery store, Walmart, and Target this week in WI. I worked in big box retail for 20 years specializing in Inventory Management. These stores are all using computerized inventory management systems that monitor and automatically replenish inventory when levels/shelf stock get low. This prevents "out of stocks" and lost sales. These companies rely on the ability to replenish inventory quickly from regional warehouses.
As I shopped this week and looked at inventory levels I was shocked. There were numerous (above and beyond acceptable levels) out of stocks across category lines at all three retailers. And even where inventory was on the shelf, the overall levels were noticeably reduced. Based on my experience, working for two of these three organizations in store management, they have drastically/intentionally reduced their inventory levels. This is either due to financial stresses/poor sales effecting their ability to acquire new inventory, or it could be the result of what was mentioned earlier regarding the transporting of goods to these regional warehouses. Either way this doesn't bode well for the what's to come. Stock up now while you can!"
#2 (From a Commenter following up #1 who didn't provide a name, January 26, 2016)
"I'd like to tailgate on the SQ Alert "based on my experienceâ¦" regarding stock levels in big box stores. This weekend we were in two such stores, each in fairly isolated communities which are easily the communities' best source for acquiring grocery items in quantity.
I myself worked in retail (meat) for thirty years so I know exactly what a well-stocked store looks like, understand the key categories and category drivers, and how shelves are stocked and displays are built to drive sales and profits. I also understand supply chain and distribution methodologies quite well.
Each of the stores we were in were woefully under-stocked. This time of year-the few weeks following the holidays-is usually big business in groceries and low stock levels suggest either poor ordering at the store level, poor purchasing at the distribution level or a purposeful desire to be under-stocked.
Anyone familiar with the retail grocery industry is also familiar with how highly touted "the big box store's" infrastructure is. They know exactly when demand is high and for what items and in what quantities. It is very unlikely that both stores somehow got "surprised" by unusually high demand. It is reasonable then to imagine that low stock levels in rural areas with few options is a purposed endeavor to assure that both the budget conscious and the folks in more remote areas are not fully able to load up their pantries.
Simply put I believe the major retailer in question is doing their part to limit the ability of rural America to be sufficiently prepared. Nevertheless, we are wise to do our best to keep ahead of the curve. God bless your efforts, Steve."
Yes, this is just anecdotal evidence, but it lines up perfectly with hard numbers that I have been discussing on The Economic Collapse Blog.
Exports are plummeting all over the globe, and the Baltic Dry Index just plunged to another new all-time record low. The amount of stuff being shipped around by air, truck and rail inside this country has been dropping significantly, and this tells us that real economic activity is really slowing down.
If you currently work in the retail industry, your job is not secure, and you may want to start evaluating your options.
We have entered the initial phases of a major economic downturn, and it is going to be especially cruel to those on the low end of the income spectrum. Do what you can to get prepared now, because the economy is not going to be getting better any time soon.
It's a symptom of the dying middle class.
Nearly all of those stores take up huge footprints in malls, yet get little traffic save for walk-thrus (at least from what I see & do). Can’t possibly maintain such inventory & footage without major traffic, all of which seems keen on going to the boutiques instead of buying similar-priced meh-fashion goods.
The rest of the stores are old high-profile retailers: not the giant square footage, but old enough to have their “cool” rooted in customers’ grandparents’ eras. Their day is passing.
So yeah, if you cherry-pick stores generations past their prime, you’ll have a list of businesses coming to their natural end.
Although a lot of this is due to the online retail trend, it is still alarming to see such stalwart institutions shuttering so many stores.
But even giant Montgomery Ward closed in better times.
I don’t see how retail stores stay open. The amount of regulation, taxes, liability, theft, employees, stock on hand, utilities, rent, etc etc one requires makes it unlikely that you could ever compete with online retailers who have the product delivered to your door usually at a lower price. You have to pay all of that even when you are not profitable in the store.
It appears that online retailers have all the advantages.
Lots of people go to stores to look at things then buy them for the best prices on the Internet because money is so tight.
The local gun shops are doing real well. ;) Just saying...
I’ve been predicting the collapse of a lot of malls since 2007. It took long enough...
One word. “Amazon”.
I was surprised by the empty spaces on the shelves in a recent Walmart visit. The only area that seems to be improving is ammo; some areas such as electronics seem to be maintaining stock, pet food stocks were down, with decreased variety in the pet area, and some of the food areas were in need of re-stocking, while produce has been re-arranged to put less in a larger area.
Despite my comments about electronics, they didn’t have what I wanted, and I ended up going to Best Buy, another dying chain where selection is down, but they had what I needed.
Real estate TAXES make brick and mortar expensive. Failed governments need those taxes to pay their bloated welfare benefits and lavish retirement to public workers.
he’s saying that a big store has purposefully not stock shelves so rural people can’t get supplies?.....sounds ridiculous but who knows....maybe part of the big “plan”....
Why fight traffic, smelly people, lines, surly clerks and high prices?
Exactly, government policies of excessive taxation and burdens such as required worker healthcare, workers comp, etc all lead to companies moving away from brick and mortar and full time employees to ecommerce. Once again, the greedy government forces people to "change", that's the kind of change Obama meant. One must change to avoid harassing government policies.
It is difficult for wilding yutes to shoplift from Amazon.
“It appears that online retailers have all the advantages.”
Yep,and they have made it very easy.
About 90% of my shopping is now done on-line.
With the LL Bean cc you can ship both ways free. In other words,buy several sizes,try them on,and ship back what doesn’t fit.
Zappos does this also.
Amazon has everything else I need.
online shopping is for some items that are relatively problem free....
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