Prepare for Retail Apocalypse Part II. While this could be considered a continuation of a trend that started years ago the number of closures about to occur will take things to a whole new level. “Soft underbelly” is a phrase that refers to the most vulnerable part of something, whether it be an organization, a system, or a physical object. This phrase was famously used by Winston Churchill to describe his idea of attacking Germany through Italy during World War II.
Today retailers closing locations across America are about to show retailing is a sector of the economy that has been given far less attention than it merits. Once these locations go empty, many may never again be occupied. This is a continuation of what started prior to the pandemic in response to Amazon and online commerce. The reality of this, for me, comes front and center when I think about the mall across the street from my office losing its last two anchor stores, Macy’s and JCPenny. Without them, the mall will be in dire straits.
While the news is focused on Artificial Intelligence, the drums of war, raising the debt ceiling, and speculation on who might run for President in 2024 few people are talking about the coming wave of retail closures. This round of forecloses will be far more devastating than what we saw in the first wave. Analysts estimate that by the end of 2023, the national brick-and-mortar footprint may be reduced by up to 20%. This is due to many retailers leveraging up when interest rates were low. This is exacerbated by the idea a recession is just around the corner.
Where money flows and who it enriches is a key component of economics, the failure to consider this is a blind spot many people have. Already many big box retailers, grocery stores, apparel chains, home goods companies, and big-name businesses like Burger King, GameStop, and Sephora have announced mass store closings in 2023. These companies are rushing to close under-preforming locations in an effort to limit the bleeding on their balance sheets.
Even while they may deny it, consumers are notorious for wasting much of the money they spend on frivolous unnecessary purchases. This means many consumers could cut their spending in a big way without drastically reducing their standard of living. When looking at the policies flowing out of Washington it is clear many politicians seem to have no idea that all consumer spending and purchases are not created equal. The fact is, consumers should take a long look at how their purchases will impact the economy over time.
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When your grocery bill goes from $ 175.00 to $250.00 per week (family of 4) for the same items, you can’t afford to go shopping for anything else. This is going to hurt retail even more. Losing $ 300.00 per month is a big deal or some of us. If you think that its hurting big box stores, just think about the small businesses that support your local schools, fundraisers, and little league, etc. They are getting hit even harder and their existence is way more fragile.
Just makes you wonder when we as a country will hit bottom? We need to save ourselves instead of worrying about the Ukraine and everywhere else put this country first, children, schools and parents first. This 2024 election will be the most important in our lifetime and our childrens don’t let it stay in the hands of the WOKES but create and replace jobs that were given away in those executive orders that were signed by Biden. it is time we take our country back provide for our own first.