Retail Store Numbers Continue to Grow
Friday, August 16, 2019
With the bankruptcy of Barney’s in the news, we’re bound to see another round of hand-wringing in the media over the “retail apocalypse.” The actual data paints a very different picture, though. As the just-released “Retail Renaissance – A Growth Story” report from IHL Group points out, retail stores are definitely not going away. According to the report, for each company closing stores, 5.2 are opening stores. For every segment of retail, there are more companies opening stores than closing stores. Even the much-maligned department store category has more brands opening stores than closing them.
The reality is that the wave of store closures seen in recent times is being driven by a handful of companies. Just 16 retailers are responsible for 73% of retail store closings so far this year, according to IHL. Retail is a dynamic, fast-changing, highly competitive industry and there are no guarantees of success. Consumer expectations are growing and evolving, and retailers must invest heavily to improve the in-store experience.
In the most recent edition of National Retail Federation (NRF’s) Consumer View report, two-thirds of consumers said technologies such as augmented and virtual reality, smart dressing rooms, and in-store navigation apps have improved their in-store experiences. At the point of sale, technologies such as self-checkout, curbside pickup, and mobile payment have made checking out an easier and more satisfying experience. The cost of implementing these technologies has been high but it appears to be paying off. If anything, stores remain an integral and growing part of the retail landscape.
According to Census Bureau data, 2018 saw a net increase in retail stores in the United States. There were almost 3,100 more stores during the fourth quarter of 2018 than the same quarter a year earlier. What’s interesting is that the increase appeared to be driven by smaller stores: Stores with fewer than five employees were the big gainers, with a net increase of 4,569 as of the first quarter of 2018 compared with the same time in 2017.
With so many billion-dollar brands that shape our retail consciousness, it’s easy to forget that retail is an industry dominated by small business: 98% of retail is made up of small businesses. The health of this segment is encouraging because it represents the future of our industry. There might well be a small business opening its first store today that will become a dominant player in the next decade. The retail landscape 10 years from now will likely be one where stores still play a vital role in the shopping experience.
The National Retail Federation, the world’s largest retail trade association, passionately advocates for the people, brands, policies, and ideas that help retail thrive. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $2.6 trillion to annual GDP and supporting one in four U.S. jobs – 42 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring, and communicating the powerful impact retail has on local communities and global economies.