Over 2,000 stores across all retail sectors have closed in the past 12 months according to a recent report from UBS retail analyst Michael Lasser, and that is just the beginning. “As of 3Q’22 (latest available data), retailers shed -1,500 net stores. This number is already up significantly in ‘23 with the likes of Bed Bath & Beyond, Foot Locker, Tuesday Morning and others closing stores recently” the UBS economists wrote.
We believe this trend should continue in the years to come, with consumers consolidating their trips and shifting towards online channels. As underperforming retail stores are shuttered, it should help the store productivity of surviving locations,” the report authors said, and predicted that over the next 5 years, “another 50,000 stores will close on the current store base of ~940K stores in the US (ex. gas and food service).”
“This simply implies that there will be -5% fewer stores by the end of ’27. As this happens, we believe this trend will benefit the large, well-capitalized retailers HD, LOW, WMT, TGT, COST) and those with unique differentiations (FND, ASO, EYE) who stand to capture a disproportionate amount of market share.” In other words, just like with US banks, the big players will only get bigger while the small ones disappear.
To put this in perspective, UBS calculates that assuming 50k stores close over the next five years and that the average sales per store is $5.7mm, it would translate to $285b of retail sales that are “up for grabs”. Assuming that 26% of these sales go online (the bank’s ’27 estimate for penetration), it would mean that retailers like WMT, HD and COST have the potential to attract $210b in sales. This translates to $1,600 annual spend per household that has the potential to shift to the leading retailers.
The good news for big retailers is bad news for the small ones:
In our view, these smaller chains and mom & pops are most at risk of closures given these firms typically have less access to capital needed to invest in developing a robust omni-channel offering. As of 2020, 57% of retail stores are operated by firms with less than 20 employees and 68% of stores are operated by chains with less than 500 employees. These smaller chains shed -40K stores in the past 10 years while chains with 500+ employees added 17K stores.
It could get even worse: the base case scenario assumes that retail sales growth continues at 4% annually which is inline with the long-term trend. However, in a downside case, the protracted US recession would put downward pressure on the UBS store closure forecast where if retail sales only grow 3.0-3.5% it would result in 70K-90K closures
UBS highlighted several factors that are driving retail store closures. They include higher costs, which raise the bar for keeping stores open; a decline in units per store in most retail sectors; and the likelihood that store closures will disproportionately affect smaller chains.
From 2007 to 2019, firms with less than 500 employees closed about 40,000 stores, or 5% of their base, while retailers with more than 500 employees added 17,000 stores. The overall cost of doing business rose significantly in the last 12 months, due in part to higher wages. Retail hourly wages, which are typically the largest cost component of running a store, increased about 5% over the last years, the analysts said.
On top of that, retailers will need to increase store productivity by 4.5% annually as retail rents per square foot increase for neighborhood and community centers. “These costs will likely continue to move higher, increasing the hurdle rate to keep stores open,” UBS said.
As RetailDive notes, about 14,000 of the estimated closings will be in the softlines sector. UBS forecasts that department stores and specialty retailers will remain net store closers. And while retailers with a heavy mall presence will continue store closings, there is a faint silver lining for off-price retailers who should grow units.
The report also singles out consumer electronics and home furnishings as retail sectors that also need to shrink their store footprint. Consumer electronics retailers should close about 9,000 stores, while home furniture stores should shrink by about 4,000 locations.
One change that’s become essential versus discretionary for retailers is an increasing embrace of digital investments like buy online, pay in store; ship from store; same-day delivery; and buy online, return in store. UBS says online retail spending per household was $9,900 in 2022, up from $8,900 a year ago and up from $4,000 in 2015. Companies with a strong DTC focus combined with high brand loyalty, like Nike and Levi’s, are best positioned for the ongoing shift to digital fulfillment.
- Takeaway #1: We estimate 50K+ stores will close by ‘27 if online penetration goes to 26% & retail sales grow 4%
- Takeaway #2: Store closures will vary by subsector
- Takeaway #3: In 2022, there were net store closings, a reversal from strong store openings in 2021
- Takeaway #4: We assume 4% retail sales growth until 2027, in-line with its long-term average
- Takeaway #5: A step change in banks willingness to lend tends to be a leading indicator of an acceleration in store closures
- Takeaway #6: Higher costs raises the hurdle rate on keeping stores open
- Takeaway #7: Store closures will likely impact smaller chains disproportionately
- Takeaway #8: Several sectors are at or near peak store productivity
- Takeaway #9: Units per store declined for most sub-sectors in 2022 (trends vary by sub-sector)
buy tiktok business account https://buy-tiktok-ads.org
buy tiktok ads account tiktok ads agency account
buy tiktok ads https://tiktok-ads-agency-account.org
tiktok ad accounts https://buy-tiktok-ads-accounts.org
buy tiktok business account https://buy-tiktok-ad-account.org
buy tiktok business account https://tiktok-agency-account-for-sale.org
tiktok ads account buy https://tiktok-ads-account-for-sale.org
buy tiktok ad account https://tiktok-ads-account-buy.org
buy facebook business manager accounts https://verified-business-manager-for-sale.org
buy tiktok business account https://buy-tiktok-ads-account.org
verified bm https://buy-business-manager-accounts.org
facebook business manager account buy buy business manager facebook
facebook business manager buy buy-business-manager-verified.org
buy verified bm https://business-manager-for-sale.org/
buy fb business manager https://buy-business-manager-acc.org/
buy verified facebook https://buy-verified-business-manager.org
buy verified facebook buy-verified-business-manager-account.org
buy facebook business manager accounts buy-bm-account.org
buy google adwords accounts google ads account buy
facebook bm account https://buy-business-manager.org/
google ads agency accounts https://ads-agency-account-buy.click
buy google ads account buy google ads accounts
old google ads account for sale https://buy-ads-agency-account.top
sell google ads account https://buy-account-ads.work
google ads agency account buy https://buy-ads-invoice-account.top
old google ads account for sale https://ads-account-buy.work
google ads account buy https://ads-account-for-sale.top
buy facebook ads accounts https://buy-accounts.click
google ads account seller buy account google ads
buy google ads account https://buy-ads-account.top
facebook ad accounts for sale facebook ad account buy
facebook ad accounts for sale cheap facebook accounts
buy a facebook ad account buy aged fb account
buy a facebook account buy fb ad account
facebook ad accounts for sale https://ad-account-buy.top/
buy a facebook ad account https://buy-ads-account.click
fb account for sale buy aged facebook ads accounts
cheap facebook accounts https://buy-ad-accounts.click
buy facebook account buy aged facebook ads accounts
магазин аккаунтов kupit-akkaunt.online
продать аккаунт https://akkaunty-dlya-prodazhi.pro/
маркетплейс аккаунтов соцсетей online-akkaunty-magazin.xyz
продажа аккаунтов https://akkaunty-optom.live/
покупка аккаунтов https://kupit-akkaunty-market.xyz/
купить аккаунт akkaunty-market.live
продать аккаунт https://akkaunt-magazin.online/
покупка аккаунтов kupit-akkaunt.xyz
маркетплейс аккаунтов соцсетей rynok-akkauntov.top
биржа аккаунтов магазины аккаунтов
account buying service https://accounts-marketplace-best.pro
social media account marketplace https://social-accounts-marketplace.live
sell accounts https://accounts-marketplace.online
account trading platform https://buy-accounts.live
profitable account sales buy-accounts-shop.pro
marketplace for ready-made accounts https://buy-accounts.space
account catalog https://social-accounts-marketplace.xyz/
account trading platform https://accounts-marketplace.live
social media account marketplace https://social-accounts-marketplaces.live
buy accounts accounts-marketplace.xyz
account buying platform https://accounts-offer.org/
database of accounts for sale account buying platform
find accounts for sale database of accounts for sale
sell account buy accounts
sell accounts secure account sales
account market website for selling accounts
ready-made accounts for sale buy accounts
purchase ready-made accounts account purchase
account selling service find accounts for sale
sell accounts account buying service
database of accounts for sale verified accounts for sale
secure account sales accounts market
buy pre-made account website for selling accounts
accounts market website for selling accounts
buy accounts account trading service
account buying service https://social-accounts.org/
account selling platform account selling service
buy accounts profitable account sales
buy account account purchase
buy accounts account sale
accounts marketplace account trading platform
account selling platform account exchange service
secure account purchasing platform account exchange
buy account accounts market
account trading service secure account sales
sell account account exchange
website for buying accounts accounts marketplace
buy accounts sell accounts
Account Purchase Account Selling Platform
Account Buying Service Gaming account marketplace
Account Buying Service https://accountsmarketplaceonline.com
Account exchange Account Sale
Verified Accounts for Sale Marketplace for Ready-Made Accounts
Account Trading Account Exchange Service
Account Trading Service Accounts market
Sell Account Account Market
Account Buying Service Secure Account Purchasing Platform
Account trading platform Account marketplace
аккаунт для рекламы https://pokupka-akkauntov-online.ru/
площадка для продажи аккаунтов аккаунты с балансом
покупка аккаунтов безопасная сделка аккаунтов
гарантия при продаже аккаунтов маркетплейс аккаунтов
купить аккаунт продажа аккаунтов соцсетей
продать аккаунт маркетплейс аккаунтов
You are in point of fact a just right webmaster.
The web site loading pace is amazing. It seems that you are doing any distinctive trick.
Furthermore, the contents are masterpiece. you’ve performed a fantastic activity in this matter!
Similar here: dobry sklep
and also here: Najtańszy sklep