Retail Apocalypse: Why are major retail chains all over America collapsing?

[tjvh]

By Michael Snyder

If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?

When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses. But now it is being projected that all of them will close hundreds of stores before the end of 2013. Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloombergdescribed February sales as a “total disaster”.

So why is this happening? Why are major retail chains all over America collapsing? Is the “retail apocalypse” upon us? Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.

Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006. The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt. The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore. So retail chains all over the United States are now closing up unprofitable stores. This is especially true in low income areas.

When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America. Just check out some of these store closing numbers for 2013. These numbers are from a recent Yahoo Finance article…

Best Buy
Forecast store closings: 200 to 250

Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125

J.C. Penney
Forecast store closings: 300 to 350

Office Depot
Forecast store closings: 125 to 150

Barnes & Noble
Forecast store closings: 190 to 240, per company comments

Gamestop
Forecast store closings: 500 to 600

OfficeMax
Forecast store closings: 150 to 175

RadioShack
Forecast store closings: 450 to 550

The RadioShack in a nearby town just closed up where I live. This is all happening so fast that it is hard to believe.

But the truth is that those store closings are not the entire story. When you dig deeper you find a lot more retailers that are in trouble.
...
So what in the world is going on here?

The mainstream media continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.

from The Trading Report

Isn't this what people voted for? I mean everything Obama has done during his first term did nothing for job creation, why would anyone expect Obama's second term to be any different?

 

[Samson]

Very scary! With less competition, the supplier will have less people to sell to and consumer will have less place to shop at. Expect prices to shoot up!

?Less people to sell to?


There are an almost infinite number of people and sellers on the internets.

If suppliers had 100 chain stores to sell to and now have 10, they have less stores to sell to. Very few suppliers sell directly to the consumer. Usually there are middle-men!

No, the internet eliminates the transactional costs, including midde men, thus expect prices to decline.

 

[rightwinger]

Amazon is doing well....I blame the Kenyan

 

[Votto]

But new stores open every day in China.

Think about it a bit and you will understand.

Yes but they have a freer economy.

 

[Dont Taz Me Bro]

It's a combination of the Internet and higher than normal unemployment, in my opinion.

 

[theDoctorisIn]

Seeing as how retail sales nationwide are up, the closing of big box stores has more to do with people shopping elsewhere than not shopping at all.

This is why armchair economics is stupid.

 

[konradv]

Isn't this what people voted for? I mean everything Obama has done during his first term did nothing for job creation, why would anyone expect Obama's second term to be any different?

I thought that was the "job creators" function. Isn't that why we're supposed to give them tax breaks? What have they been doing? Seems there were more jobs when the taxes were higher. I guess they figured they needed to work harder back then and now they don't!

 

[healthmyths]

Very scary! With less competition, the supplier will have less people to sell to and consumer will have less place to shop at. Expect prices to shoot up!

?Less people to sell to?


There are an almost infinite number of people and sellers on the internets.

Of course the number if ip addresses is infinite.
Never studied math?

NO not infinite! IP6 addressing scheme provides approximately 4.8×1028 addresses for each of the seven billion people alive in 2011
IPv6 - Wikipedia, the free encyclopedia
48,000,000,000,000,000,000,000,000,000 for each person of the 7 billion people... A big number BUT NOT INFiNITE!!!
48 octillion

 

[bucs90]

Many reasons.

People haven't had wage increases (Yet, the rich keep getting richer)
People are being thrifty, dont need new fashion and toys all the time anymore.
People are sharing more.

People are getting by however they can. I for one will applaud and laugh when some rich folks start losing it all. The poor and middle class will do fine getting by, they've done it forever. The rich...well, they'll collapse. They dont know how to function in any other way but being wealthy. Suicide rates among the rich will spike.

 

[FA_Q2]

But new stores open every day in China.

Think about it a bit and you will understand.

Yeah, corporations don't care who's buying their products. And China has got over a BILLION customers. America only has about 300 million.

Retail sales are increasing, what we are seeing is a retail sales model dying.

Multiple replies later and it seems that the entire board ignored your link...

As you point out, the problem is that these large stores have not moved with the times where retail is not about big store fronts but fast and efficient internet access and shipping. These places are relics of the past. There is one concern over pricing because as retail is changing there is the fact that the number of retailers is shrinking. the internet is jsut so much more efficient that you can successfully control MUCH larger markets than previously thought possible.