A new UBS report says as many as 80,000 U.S. retail stores, or about 9 percent of the country’s total, could close by 2026, CNBC reports.
The pace of store closures is down from its 2019 peak, but the report says the country might still have too much retail per capita.
At the end of 2020 there were 115,000 shopping centers, including strip centers, malls, outlet and other lifestyle centers in the U.S. That’s compared with 112,000 in 2010 and 90,000 in 2000.
This comes out to around 59 square feet of shopping center space per U.S. household — a slight decrease from the 62 feet from 2010, but still better than the 55 square feet from 2000 and 49 from 1990.
Now, UBS is expecting the proliferation of eCommerce to continue.
“An enduring legacy of the pandemic is that online penetration rose sharply,” analyst Michael Lasser said, according to CNBC. “We expect that it will continue to increase, which will drive further rationalization of retail stores, especially as some of the unique support measures from the government subside.”
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eCommerce could rise to be around 27 percent of total retail sales by then, an increase from 18 percent now.
For now, though, store openings are still at a good pace, even in spite of the digital emergence that happened during the pandemic. There have been numerous businesses taking advantage of the cheaper rents from the COVID era, for example, with a lot of empty spaces to pick from.
Much of the growth has come from retailers working in beauty, grocery and discount goods.
So far this year, the U.S. has reported 3,169 store closures and 3,535 store openings, CNBC reported.
Some iconic retailers, including J.C. Penney, have been on the verge of closing down — though many retailers don’t die, but instead end up coming back in different form. J.C. Penney has done that now with a new slimmed-down model where it’s operating only about two-thirds of what it once had. The company is working with fewer vendors and adding more private labels to help with cash flow.
