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Mass store closures have continued throughout the entire year of 2021 as the retail apocalypse accelerated the demise of several household brands that have failed the test of time. An equally horrifying fate is affecting U.S. malls, which are getting increasingly emptier and closer to bankruptcy as consumer patterns change. Roaring inflation and supply chain shortages are also compromising the performance of several businesses given that customers are being left with higher prices and fewer choices. Industry experts say that the collapse of brick-and-mortar retailers has become inevitable at this point. Mostly because in-store experiences are not as appealing as they used to be for consumers. Even brands that came up with creative ways to entice customers to visit their stores are filing for bankruptcy due to their inability to survive in such a competitive environment.
On top of that, the health crisis is undoubtedly contributing to people’s fear of enclosed public spaces. Many Americans have been avoiding physical stores since mask mandates and movement restrictions started to be introduced in March 2020. As economic conditions started worsening again — with inflation at a 40-year high while people’s purchasing power steadily drops — many of the stores that managed to stay afloat until this point are being pushed to the brink of bankruptcy. That’s why, for thousands of U.S. stores, this holiday shopping season is going to be the last. With widespread shortages of supplies, a reduced labor force, and collapsing profits, several retailers are being forced to close doors for good.
Amongst them, Sears and Kmart, two brands that once proudly dominated the US retail landscape and actually emerged from bankruptcy three years ago, are hanging by a thread once again — and industry executives are betting on the extinction of both brands. Today, there are only 21 full-line Sears stores left in the United States, according to the store locator on the Sears website. And if sales are proven to be good enough by the end of this quarter, there will be only six Sears stores left in the country. But if earnings disappoint, that will be the end. Of course, Sears and Kmart are not the only retailers struggling with the shift of consumer patterns towards e-commerce or big-box retailers, such as Walmart and Target. You’ve probably heard about the fatal collapse of JCPenney and Neiman Marcus, which filed for bankruptcy right after the onset of the health crisis, while Lord & Taylor went out of business, and other brands, such as GameStop, Gap, Disney have started to shut down thousands of stores to financially recover.
Many more are still in trouble as the retail apocalypse drags on. Considering that vendors are having major problems supplying much stronger retailers with the inventory they need due to the current supply chain crisis, it’s getting exceedingly difficult for troubled retailers to get the products their customers want. And the ongoing labor shortage makes it even more difficult for the struggling chains to attract the workers they need. And at least 3000 more stores could be closed after this holiday season if the volume of sales isn’t enough to compensate for the losses recorded over the course of the year. Experts say that the total could reach 10,000 stores or more by mid-2022, especially if the economy falls into recession again. Another issue these struggling brands are having to cope with is the rise of retail theft. In California alone, retail theft accounts for $15 billion in losses every year. Recent reports have been describing “smash and grab” incidents happening all over the state. Rachel Michelin, president of the California Retailers Assn., said in a recent interview that in San Francisco and Oakland alone, businesses lose $3.6 billion to organized retail crime each year.
Meanwhile, American malls are dying a slow and painful death. These American cultural touchstones are also disintegrating as part of the retail apocalypse. Companies that stayed in the market for over a century are seeing their consolidated brands fade away as the apocalypse sweeps through the retail industry and leaves thousands of vacant stores and collapsing malls in its wake. Sadly, about 250 malls across the country are on the brink of bankruptcy and might be gone by the end of 2022. However, things are only going to get worse in the sector, because according to UBS, at least 80,000 retail stores are threatened by closure as e-commerce rises and the economy slides. Unfortunately, as consumers have to cope with sharp price hikes, rampant inflation, and an unstable economic and financial scenario, America’s retail landscape will never be the same. Every apocalypse marks the end of an era. And our future lies in the unknown.
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