Tags: Retail | Bankruptcies | Store | Closings | Record | Pace

CNBC: Retail Bankruptcies, Store Closings on Record-Setting Pace

(Getty)

By    |   Friday, 05 May 2017 02:56 PM

The retail industry reportedly is setting a record-setting pace for bankruptcy filings and store closings, with more soon expected despite what most consider a healthy consumer.

“This tipping point for retail is the result of a number of compounding reasons, but the inability to pay looming, massive debt bills is dealing the final death blow to many,” CNBC.com reported.

Among the plethora of reasons is that half of the retailers who have filed for Chapter 11 protection were owned at least in part by private equity, CNBC.com reported.

In addition to that, Chapter 11 bankruptcy is now turning into liquidation much more frequently due to law changes, CNBC reported.

And the cliche of the online mouse dooming brick-and-mortar stores is once again applicable, to a degree, that is.

"More shopping is shifting online in general, and to Amazon specifically, as in-store shopping traffic and sales trends fall for many retailers and shopping centers. Slice Intelligence said 43 cents of every online dollar is spent on Amazon, based on its analysis of millions of email receipts," CNBC reported.

"However, according to the latest Commerce Department retail sales data, 86 percent of all retail sales (excluding motor vehicles and parts and food service and drinking locations) are still made in physical, brick-and-mortar locations. To be sure, the online versus in-store sales breakdown varies wildly from retailer to retailer,"

Meanwhile, the American grocery store has so far been mostly immune to the ravages of online shopping and the all around apocalyptic outlook facing the nation's retailers. But a war is coming to the staid supermarket, and that could mean more consolidation, bankruptcies, and falling prices, Bloomberg reported.

"An invasion is getting under way. Lidl, a German retailer known for low prices and efficient operations, is expected to start an aggressive U.S. expansion in the coming weeks that could open as many as 100 new stores across the East Coast by the summer of 2018. The company, which runs about 10,000 stores in Europe, has also set its sights on Texas, one of the most competitive grocery markets in the U.S. Analysts expect Lidl to expand to nearly $9 billion in sales by 2023," Bloomberg reported.

The last thing U.S. grocers need is more cutthroat competition. As the ranks of U.S. grocery stores have swelled, food has become a way for struggling brick-and-mortar retailers such as dollar stores and pharmacies to compete for customers. Even though groceries have been somewhat insulated from online pressure, Amazon.com remains dedicated to cracking the code, finally, on fresh food.

And traditional shopping malls, the haven of the 1970s-1980s, obviously aren't exempt from this fatal retail virus.

Steve Beaman, chairman the Society to Advance Financial Education, recently told Newsmax TV that mass store closures and layoffs by Sears, Macy’s and Kmart only prove that the retail industry continues to undergo a sea change because of online shopping.

And this seismic shift may soon extinguish a cultural landmark of the recent past – the American shopping mall.

JD Hayworth asked Beaman on "America Talks Live" if malls are a relic of a bygone era.

“My personal opinion is they are,” he said. He cited many many requiring adults to chaperone those under the ages of 21 or 18.

“So we're already going to see the demise of it being the hang out for kids and I think that will change the retailing habits of it. The overall security concerns of the bricks-and-mortar retailers is going to become a draining cost on them. So, they're going to think more and more let's go to the internet,” he said.

(Newsmax wires services the Associated Press, Bloomberg and Reuters contributed to this report).

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
The retail industry reportedly is setting a record-setting pace for bankruptcy filings and store closings, with more soon expected despite what most consider a healthy consumer.
Retail, Bankruptcies, Store, Closings, Record, Pace
610
2017-56-05
Friday, 05 May 2017 02:56 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved