Over on the Visual Capitalist, they put out an article earlier this week that highlighted the weakness in retail and the resulting bankruptcies and store closures. There have already been 3,000 store closings YTD with the expectation that this number could more than double by year end. The way people shop has definitely evolved and businesses are trying to keep up. One statistic that they point to is the % of retail sales that comes from e-Commerce. Back in 2000 e-Commerce sales accounted for less than 1% of total retail sales and that number has continued to climb year over year and now sits at 8.3%. For the traditional “brick and mortar” stores this is a serious issue.
Below is a graph that illustrates the number of Retail Bankruptcies going back to 2010. YTD there have been 14 retail bankruptcies which puts us on track to see about 52 for all of 2017.
We shall see if this is just a near-term blip, but more and more data is pointing to shoppers buying items from car tires to TV’s in the comfort of their living rooms. This could result in a bigger impact than people initially realize as that exiting retail space may end up being closed, converted or even demolished. Given that Personal Consumption accounts for 70% of GDP, this is something to keep an eye on going forward.
