Wal-Mart, Nordstrom, and other retail giants continue to close stores in the United States! Or nearly 50,000 will be closed!
According to a report by CNN, Walmart, Nordstrom, and other retailers will continue to close stores in the United States this year, and there are complicated reasons behind this. According to the plan, Wal-Mart will close about 20 stores in the United States this year. Nordstrom will close 15 stores. The pharmacy chain CVS announced in 2021 that it would close 900 stores within three years. According to a UBS report this year, between 40,000 and 50,000 retail stores in the U.S. will close over the next five years.
Some government officials, including the mayor of New York, pointed to a surge in retail store theft as the main reason for the large number of store closures. Walgreens also cited the impact of frequent theft when it decided to close five San Francisco stores in 2021. According to the National Retail Federation’s survey of about 60 retail member companies, frequent theft has become the factor that has caused the most losses to these retailers in recent years.
However, some analysts believe that the wave of store closures has been going on for many years, and the relationship with the crime rate is not close, and the relationship between supply and demand is the most critical. Under the influence of the new crown Covid-19, remote working methods in the United States are rapidly popularizing. According to the U.S. Census Bureau, the number of people working from home in the U.S. rose from 9 million to 27.6 million between 2019 and 2021, hitting many downtown malls where commuters are the main customer base. According to a study by Stanford University, the average American office worker now spends $2,000 to $4,600 less per year in the city center than before Covid-19. Online shopping also continues to weigh on offline retail. According to data from the U.S. Census Bureau, in the fourth quarter of last year, online retail sales accounted for 14.7% of total U.S. retail sales. Clothing, accessories, health care products, and electronic products were the most affected by online shopping.
In addition, increasing labor costs and store rents have also hit retailers hard. According to data from Cushman & Wakefield, an American real estate consulting company, in San Francisco, the average store rent reached US$43 per square foot in the first quarter of this year. A JPMorgan study found that the number of retail storefronts in San Francisco decreased by 6% from 2019 to 2021.
In conclusion, due to the impact of Covid-19 and the rapid development of online shopping, the physical stores of many brands have been greatly affected. Now the development strategies of many retail enterprises are forced to change. Enterprises must keep pace with the times and change their corporate strategies as soon as possible.
