Storefronts that provide services have exceeded the number of those offering clothes and other merchandise. Per a JLL report, the number of service-based retailers rose 20.5 percent between 2002 and 2017, coming in at 1.2 million spaces, while retailers offering goods declined 4.5 percent to 1.1 million stores over that time frame, CNBC reported.
JLL Director of Retail Research James Cook said that the growth in service-based companies “will plateau at some new percentage.” He also noted that retail “is not going to go back to the way it was,” and that “we are looking to services to be the occupiers.”
Service retailers now comprise 52.6 percent of retail space in America. By contrast, firms that are geared toward selling merchandise account for 47.4 percent of space, per JLL. Retailers offering merchandise comprised 53.2 percent of physical retail in 2002, with the figure declining since that time.
According to the report, stores must provide some value-added offering that can’t be obtained on the web, as an increasing number of consumers shop via eCommerce.
Additionally, some merchants are piloting temporary, smaller formats as they aim to engage consumers in the online age. The pop-up sector is forecasted to bring in $50 billion in yearly sales.
The report also noted that some major retailers, such as Barneys New York and Pier 1 Imports, have filed for bankruptcy protection within the past year.
In separate news, JCPenney, Macy’s, Papyrus, Pier 1 Imports and Express, among other retailers, have reported 1,218 closings so far this year, per Coresight Research. In 2019, 9,200 stores shuttered. This will be the fourth consecutive year that retailers will close 100 million square feet of space, which equals approximately 562 Walmart supercenters.
Robin Trantham, a consultant for real estate data tracker CoStar, said per past reports, “This year will generally be more of the same. We expect many companies – and many sizable companies – to announce closures.”