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)
"Steve-
[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 experience…" 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.
butter for one is sky high.....how can you be a real cook or baker without butter?
This guy is talking about grocery stores. Maybe it's different in VA but I just shopped for groceries yesterday after church and the shelves were all fully stocked. And I'm as good a judge as the guy quoted, I have 15 year experience in retail store management and as a widower I do all my own shopping.
Well keep returning that stuff. Most of the clothing I own comes from the LL Bean return center in Nashua NH.
This is from Steve Quayle, the guy who thinks that ‘transhumans’ and robots are going to team up and do the Illuminati’s dirty work by killing off 90% of the human race.
Jeremiah Johnson made his way into the mountains
Bettin' on forgettin' all the troubles that he knew
The trail was wide and narrow
And the eagle or the sparrow
Showed the path he was to follow as they flew.
A mountain man's a lonely man
And he leaves a life behind
It ought to have been different, but oftimes you will find,
That the story doesn't always go that way you had in mind.
Jeremiah's story was that kind. . .
Jeremiah's story was that kind.
The way that you wander
Is the way that you choose
The day that you tarry
is the day that you lose.
Sunshine or thunder, a man will always wonder. Where the fair wind blows.
An Indian says you search in vain
For what you cannot find.
He says you'll find a thousand ways
For runnin' down your time.
An Indian didn't scream it
He said it in a song.
And he's never been known to be wrong.
He's never been known to be wrong.
.
And some folks say...He's up there still.
Part of the problem early in the year is people are paying into their deducible. My family has to pay $2,000 before the health insurance kicks in and mine is a good policy. So that is $2,000 less I have to spend in the first quarter that 5 years ago I had no deducible. To me it is easy to see why the first half of the year is slow.
Supposedly where we live is one of the better financial areas.
We started seeing an interesting trend last November, the lack of shoppers a few days before the normal paydays of the 1st and the 15th of the month. Besides less shoppers, there is less traffic around the shopping areas.
Last Thursday, we did our monthly Costco shopping trip. There were no lines at the Costco gas station, and we pulled up to a pump at 10:30 am. Then, we went into the main Costco parking lot and there were parking places everywhere, no need to circle or head a quarter of a mile away to get a parking place.
The only crowds in the store were at the food sample areas, a lot more than we normally see. Customers were doing some real chowing down at the free sample stands.
When we finished shopping, we walked up to an open cash register and checked out with no waiting.
Then, we did our monthly semi junk food stop at the local Popeyes. Again no parking problems and we walked right up to the order counter and placed our order. There was a handful of customers versus a normal full house with customers waiting to place their orders.
On the way home, instead of getting stopped at traffic lights due to heavy traffic, we made it home with only one red light out of 20 something traffic lights due to the light traffic.
There was a similar lack of customers at Raleys and Walmart when we finished our shopping on the next day, Friday. We walked up to the cash registers with no one standing in line ahead of us.
The above is not scientific and is only our observation in one market area. Our unscientific observation is that many people are not shopping until paydays. Maybe they are maxed out on their credit cards before and after Christmas.
Yet it is possible and growing.
Which is why sales of security camera setups have skyrocketed.
I have noticed empty shells as well - I took it to mean stores are doing Just In Time inventory and no longer keeping a lot of stock at their warehouses. Also, I noticed a reduced number of name brands at stores. Many brands that were well established no longer can be easily found except online for me.
It’s not only federal regulations and taxes. Many cities and states are very unfriendly towards business and the big movement now is the mandatory minimum wage hikes, mandatory sick leave, etc etc. Taxation by local governments is more out of control than federal tax hikes in lots of places. Examined over a 20 year period local taxes such as property and sales tax has far exceeded the rise in federal taxes.
It’s fair to suggest that government at all levels in most of America has become hostile towards business. The big corporations that own the politicians continue to do well and pay little in taxes squeezing the little guys out of the field.
The playing field is not level and has not been for some time with small business at the biggest disadvantage, but many large municipalities are squeezing businesses out of the city limits and some are just choosing to close their doors rather than move.
I'm one of those people. Since approximately 1998'ish, I've purchased everything I can on-line to avoid sales tax as I'm a "starve the government beast of revenue" kinda guy.
Until this year, I could literally buy anything on Amazon.Com and not pay sales tax to the State of Illinois. Combined with free shipping and better pricing on Amazon, I saved money, starved the government beast and was happy.
NOW, I have to be very careful when I buy on Amazon to avoid paying sales tax as Amazon agreed to collect State Sales Tax for Illinois. This means purchasing anything on Amazon "fulfilled by Amazon" is subject to a 6.75% Illinois State Sales Tax. This was agreed to by Amazon and the State of Illinois as Amazon is building a fulfillment warehouse center @ 30 minutes from where I live.
Now, I can avoid the sales tax on Amazon if I purchase from the "Amazon Marketplace" which typically still has better prices than purchasing via brick and mortar stores locally, but I pay shipping for those items typically.
As we see Amazon displacing more and more brick and mortar stores and building more fulfillment warehouse centers across the country, the benefits of buying on Amazon are going to become somewhat diminished as those states that charge sales tax will be forcing Amazon to charge it and pass that back to the states. Charging and passing Sales Tax back to the states of course requires additional processing by Amazon (more electronic paperwork, etc..) which will also drive costs up to end consumers as well.
The biggest beneficiary of Amazon charging sales tax in Illinois happens to be stores like Best Buy, HH Gregg and other electronics retailers. They've started matching Amazon's price to make sales and have seen pretty big upticks in business as a result.
I hadn't purchased ANYTHING at Best Buy in over 10 years until recently when I purchased a new Samsung 4k TV there after they not only matched Amazon's price, they lowered the price a little more to match the difference in sales tax too. Illinois State Sales Tax is 6.75%. Counties and municipalities add onto that. To match the price, Amazon had to lower the price to "eat" the additional 2.5% in sales tax that the local county and municipality added, bringing the total sales tax to 9%.
Once Best Buy lowered the price to cover the 2.5% difference in sales tax, it was a slam dunk to buy the TV locally vs. Amazon.
This is exactly what brick and mortar stores are going to need to do to compete with the likes of Amazon.
Prices have skyrocketed in the last 8 yrs.. but you can get incredible saving shopping online.
Bush’s fault and Zero just hasn’t had time to fix it yet.
Consider the white collar jobs that have migrated to India, never to return. Consider the blue collar jobs that have migrated to China, never to return. Now consider the crappy paying retail jobs that emerged to replace them.
Then consider many of those retail jobs going away now. It is like the Middle Class is being herded into an economic kill zone, and then when they are all gathered in retail jobs, then the killing starts.
“Most of the clothing I own comes from the LL Bean return center in Nashua NH.”
Last year I returned a $200.00 wool coat(woman’s) because I thought that the fabric was inferior for the price. I hope someone got a good deal on that.
.
My wife shops on Amazon several times a week - much easier than dragging the kids around town and stores. On top of that, we like the rating system on Amazon. Easy to tell you are getting a great product when it’s rated 4 stars or better by a few thousand people.
I even look at the Amazon ratings on products when I am at a retail store and price compare before I buy. Amazon is sometimes cheaper and every so often you can find the same thing for 50% less than the retail store wants for it.
Which is interesting because milk price is half of what it was a year ago (Indiana).
Only because Amazon doesn't sell guns.
Negros can break an anvil...
...don’t make it harder than it is.
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