Posted on 03/11/2014 12:24:53 AM PDT by 2ndDivisionVet
If the U.S. economy is getting better, then why are major retail chains closing thousands of stores? If we truly are in an "economic recovery", then why do sales figures continue to go down for large retailers all over the country? Without a doubt, the rise of Internet retailing giants such as Amazon.com have had a huge impact. Today, there are millions of Americans that actually prefer to shop online. Personally, when I published my novel I made it solely available on Amazon. But Internet shopping alone does not account for the great retail apocalypse that we are witnessing. In fact, some retail experts estimate that the Internet has accounted for only about 20 percent of the decline that we are seeing. Most of the rest of it can be accounted for by the slow, steady death of the middle class U.S. consumer. Median household income has declined for five years in a row, but all of our bills just keep going up. That means that the amount of disposable income that average Americans have continues to shrink, and that is really bad news for retailers.
And sadly, this is just the beginning. Retail experts are projecting that the pace of store closings will actually accelerate over the course of the next decade.
So as you read this list below, please take note that things will soon get even worse.
The following are 20 facts about the great U.S. retail apocalypse that will blow your mind...
#1 As you read this article, approximately a billion square feet of retail space is sitting vacant in the United States.
#2 Last week, Radio Shack announced that it was going to close more than a thousand stores.
#3 Last week, Staples announced that it was going to close 225 stores.
#4 Same-store sales at Office Depot have declined for 13 quarters in a row.
#5 J.C. Penney has been dying for years, and it recently announced plans to close 33 more stores.
#6 J.C. Penney lost 586 million dollars during the second quarter of 2013 alone.
#7 Sears has closed about 300 stores since 2010, and CNN is reporting that Sears is "expected to shutter another 500 Sears and Kmart locations soon".
#8 Overall, sales numbers have declined at Sears for 27 quarters in a row.
#9 Target has announced that it is going to eliminate 475 jobs and not fill 700 positions that are currently empty.
#10 It is being projected that Aéropostale will close about 175 stores over the next couple of years.
#11 Macy's has announced that it is going to be closing five stores and eliminating 2,500 jobs.
#12 The Children’s Place has announced that it will be closing down 125 of its "weakest" stores by 2016.
#13 Best Buy recently shut down about 50 stores up in Canada.
#14 Video rental giant Blockbuster has completely shut down all of their stores.
#15 It is being projected that sales at U.S. supermarkets will decline by 1.7 percent this year even as the overall population continues to grow.
#16 McDonald's has reported that sales at established U.S. locations were down 3.3 percent in January.
#17 A home appliance chain known as "American TV" in the Midwest is going to be shutting down all 11 stores.
#18 Even Wal-Mart is struggling right now. Just check out what one very prominent Wal-Mart executive recently admitted...
David Cheesewright, CEO of Walmart International was speaking at the same presentation, and he pointed out that Walmart would try to protect its market share in the US – where the company had just issued an earnings warning. But most of the growth would have to come from its units outside the US. I mean, via these share buybacks?
Alas, outside the US too, economies were limping along at best, and consumers were struggling and the operating environment was tough. "We're seeing economies under stress pretty much everywhere we operate," Cheesewright admitted.
#19 In a recent CNBC article entitled "Time to close Wal-Mart stores? Analysts think so", it was recommended that Wal-Mart should close approximately 100 "underperforming" supercenters in rural locations across America.
#20 Retail consultant Howard Davidowitz is projecting that up to half of all shopping malls in America may shut down within the next 15 to 20 years...
Within 15 to 20 years, retail consultant Howard Davidowitz expects as many as half of America's shopping malls to fail. He predicts that only upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive.
So is there any hope that things will turn around?
Well, if the U.S. economy started producing large numbers of good paying middle class jobs there would definitely be cause for optimism.
Unfortunately, that is just not happening.
On Friday, we were told that the U.S. economy added 175,000 jobs during the month of February.
That sounds pretty good until you realize that it takes almost that many jobs each month just to keep up with population growth.
And according to CNS News, the number of unemployed Americans actually grew faster than the number of employed Americans in February...
The number of unemployed individuals 16 years and over increased by 223,000 in February, according to the Bureau of Labor Statistics (BLS).
In February, there were 10,459,000 unemployed individuals age 16 and over, which was up 223,000 from January, when there were 10,236,000 unemployed individuals.
Meanwhile, the labor force participation rate continues to sit at a 35 year low, and a staggering 70 percent of all Americans not in the labor force are below the age of 55.
That is outrageous.
And things look particularly depressing when you look at the labor force participation rate for men by themselves.
In 1950, the labor force participation rate for men was sitting at about 87 percent. Today, it has dropped beneath 70 percent to a brand new all-time record low.
The truth is that there simply are not enough jobs for everyone anymore.
The chart posted below shows how the percentage of working age Americans that actually have a job has changed since the turn of the millennium. As you can see, the employment-population ratio declined precipitously during the last recession, and it has stayed below 59 percent since late 2009...
If we were going to have a "recovery", we should have had one by now.
Since there are not enough jobs, what is happening is that more highly educated workers are taking the jobs that were once occupied by less educated workers and bumping them out of the labor force entirely. The following is an excerpt from a recent Bloomberg article...
Recent college graduates are ending up in more low-wage and part-time positions as it's become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York.
The share of Americans ages 22 to 27 with at least a bachelor's degree in jobs that don't require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.
Due to the fact that there are not enough middle class jobs to go around, the middle class has been steadily shrinking.
In 2008, 53 percent of all Americans considered themselves to be "middle class". Today, only 44 percent of all Americans consider themselves to be "middle class".
That is a pretty significant shift in just six years, don't you think?
For much more on this, please see my previous article entitled "28 Signs That The Middle Class Is Heading Toward Extinction".
Despite what the politicians and the mainstream media are telling you, the truth is that something is fundamentally wrong with our economy.
On a gut level, most people realize this.
According to one recent survey, only 35 percent of all Americans say that they are better off financially than they were a year ago. And according to a recent NBC News/Wall Street Journal poll, only 28 percent of all Americans believe that this country is moving in the right direction.
The frightening thing is that this is about as good as things are going to get. The next great wave of the economic collapse is approaching, and when it strikes the plight of the middle class is going to get a whole lot worse.
But Obama manages to keep the public talk locked on Ukraine, global warming, homos in Russia, bombing Syria,,,, ANYTHING except the facts in this story, or of Obamacare.
I agree with the general premise of the article, but I should mention that in my area a Nordstrom Rack and a new costco were opened.
Problem with stuff like this article is that they sometimes forget to include the stores that are doing better. The US government had to buy out GM, but Ford was (and is) thriving.
#14 Video rental giant Blockbuster has completely shut down all of their stores.
Actually GM bought back a lot of it’s shares and last I heard was doing reasonably well. If the big money boys cannot sell their wares, perhaps they will lower their own salaries and pay their workers better so they can afford to buy. Also, people have so much STUFF that we have a 700 mile yard sale in the mid south/central, and another 70 mile yeard sale somewhere else.
Let’s not forget while we are all forced to buy obamacare Sandra Fluck will get free birth control.
Also, people have so much STUFF that we have a 700 mile yard sale in the mid south/central, and another 70 mile yeard sale somewhere else.
Now fast forward to KY. Rural KY is, in some ways, like living in a third world country. People are definitely poorer here. And the real estate taxes and cost of living are so low that you can live on ridiculously low income. But it means a huge part of the population shops at garage sales and “Peddlers’ mall”. This results in a peculiar supply and demand formula.
i.e. stuff is WAY too expensive at garage sales to even bother. Some stuff is more expensive than new, and a fair amount of it (much worse than in Seattle) just needs to go to the dump.
We stopped wasting our time.
This simply isn’t possible. MY TV has been telling me for years that the Obama economy is fantastic! Why, just look at the DOW!!
(look at anything else, though, and you might be a racist.)
Much of tthis list is anecdotal as consumer spending has shifted to online purchasing. We don’t even go to PetSmart anymore, since the kitty food is cheaper in online bulk. I can’t remember the last time i went Christmas shopping at a mall, yet, my spending is the same. I remember the kids at Blockbuster, two years before my favorite store’s demise, asking me not less than three times every time I was at the checkout to sign up for their online services. One day, I finally got annoyed and asked “you DO realize that your trying to sell away your own job, right?”. He replied “oh no, Blockbuster just wants you to have the option of finding other movies that we don’t carry. “Uh uh.
Another anecdote... At least our area restaurants are still really packed on the weekends...for now... B-HO’s carnage has still yet to be seen as it’s masked by social support.
One thing that isn’t mentioned in relation to the death of America’s middle class is the impact the male unemployment rate is playing. When it became acceptable to discriminate against white/Asian men in college admissions (and hiring/promoting), the women who took many of those jobs have also foregone children (for a variety of reasons, whether by their choice or the prospective mates’ choices); the American middle class is literally dying out as no successive generation is born (though we have imported some foreign replacements). What use does the average American have for so many things that were staples in our youth, such as diapers, children’s clothing, toys, etc.?
As long as these demographic trends continue, one needs look no further than the Xanadu mall here in northern NJ to see the future of retail: A massive mall, completed years ago (complete with indoor ski slope), that never opened, while in its shadow every Saturday at the Meadowlands Flea Market Americans sell their household goods and tools of their former trades to imported replacement Americans who pay strictly with the cash with which they are paid.
Um... What was that?
It’s the rewind fees that kept me away from blockbuster.
Boon: Forget it. He’s rolling.
I must disagree with this fellow. Internet shopping does account for the “great retail apocalypse”. When you can get all your media online, why would you shop for it? I can’t count the last time I went to a Radio Shack, or an office products store, or J. C. Penny, or Sears. A lot of jobs at Wal-Mart and Target are being replaced by automation. The low prices offered by internet retailers and the big-box stores murder anything offered by small or medium businesses.
Frankly, what strikes me as bogus is #14, about Blockbuster. Who even goes to Blockbuster anymore? You have the internet, you have Netflix, and you have Red Box, all of which provide faster and cheaper service with less hassle. Don’t have to worry much about late fees.
Unless you’re running a hobbyist place or some specialty thing, having retail space is just plain getting to be obsolete. I wouldn’t start any new retail business with it. I’d keep it internet only, save on capital outlay.
That graph you posted is terribly designed, makes a 4% drop look like 100%. The employment situation is bad enough when presented accurately, does not need a misleading graphic to make the point.
We live in Central Kentucky and for that matter way out in the ‘sticks’. Nearly all of our discretionary shopping is done on-line. One of the biggest changes we’ve noticed over the years is that our impulse buying has nearly stopped. It’s only when we do our bi-weekly grocery shopping that we purchase items that we really don’t ‘need’ but decided to buy anyway.
If our particular shopping habits are becoming more common then it is no wonder so many stores are closing down. No demand means no money coming in equals going out of business. It’s as simple as that.
The real question here is: What is the future for retail business in the long and short-terms? My own guess is that we will see more on-demand manufacturing for products as they are needed.
My own latest personal example was I needed a new desk. My old one was a mass production piece that was made of inferior materials and covered in veneers and ‘paper’. My new one although being smaller that the old one is a sturdy hand-made piece made out of walnut by a local craftsman. I paid a nice sum for it and I can say it will last a long-time and probably be handed down to one of my grand-children later in this century.
the facts of the story are the amount of dollars left in the personal/family budget after paying the new “affordable care” premiums and deductibles- the insecurity and personal economic cutbacks that come from not being able to afford any health insurance at all-the reality of living with a smaller job and smaller paycheck-the reality that food bills are up and utiltity bills are borderline frightening and while it is now the obama norm, it hasn’t gotten easier to pay $3.50-$4 per gallon of gasoline
heating our house to a comfortable temperature has now become a luxury item in our budget, so in winter months we just don’t have much extra to spend - seldom go to the mall or shopping anywhere
but I think with obamacare, the democrats finally outdid themselves in raiding the family budget. where did they think most people would have all that extra money?
“One of the biggest changes we’ve noticed over the years is that our impulse buying has nearly stopped.”
That is more related to a decline in discretionary funds (at least in my case, and many people I know). Retail is in trouble because the consumers are in trouble.
Online shopping is killing brick & mortar stores because as people run out of money, they can get great deals not just for new merchandise but also secondhand (on Craigslist, for example - an online flea market). My wife has scored great deals both buying and selling there, and the “legitimate” economy plays no role in it at all.
Even worse, the tight budgets have led to a catastrophic decline in the birthrate; retailers have to hope the porous borders let in enough replacement Americans (though these are usually more shrewd with their money). As more and more people are living paycheck to paycheck, the only people I see freely spending are 1) government workers, particularly tenured teachers and others with seniority (protection from layoffs) and 2) wealthy childless people. There are simply not enough of them to keep all those stores in business.
Living in a dying state (NJ), there are a lot of great secondhand deals around as Americans liquidate and flee. Even Wal-Mart can’t compete with the low prices, and older American goods in good shape are much more sturdy than the cheap Red Chinese garbage peddled in stores.
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