American retail goes online
Physical stores in the United States began to close twice as often.
The development of online commerce, which allows sellers to significantly save money, encourages companies to close their physical stores. As a result, over the first half of the year in the USA more than 7 thousand points of sales were closed, and by the end of the year this figure could be twice as large as last year.
According to Coresight Research, which monitors the situation with the closing and opening of physical stores, in the United States by July 18, 7,426 points of sale were closed. This is about a quarter more than in all of 2018. Moreover, in the second quarter, the pace of retailers leaving the streets was the highest in the last nine years. At the end of 2019, the number of closed stores could reach 12 thousand, according to analysts at Coresight Research, which is twice as many as last year.
The closures of physical stores are associated either with bankruptcy of companies, or with the desire of retailers to tighten their belts and reduce costs by going online. The latter is becoming increasingly popular with the American population - back in February, the US Department of Commerce announced that online sales in the country for the first time in history overtook sales in physical stores in terms of revenue. Among those who are actively closing their stores, Victoria’s Secret, Gap, Fred’s and, for example, the bankrupt Charlotte Russe and Charming Charlie, who will close all their points of sale. Only the last two companies account for about 800 physical stores, which will definitely be liquidated.
As noted by the Financial Times, the record low level of construction of new commercial buildings in the United States in recent years has significantly increased the employment rate of space in shopping centers. According to CBRE, an American commercial broker, it grew in 16 of the last 22 quarters. Nevertheless, this does not mean that the area will be empty everywhere. The amount of vacant space depends on the level of the shopping center itself. According to the consulting company Green Street Advisors, 97% of the premises are occupied in class A ++ shopping centers, and only 67% in the centers of the lowest class. In addition, the owners of the property itself are looking for ways to occupy the vacated areas not only by other traditional retailers - offices of online stores, cafes, restaurants, hotels and even apartments are replacing the shops.