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Apocalypse? Not Now: Retailers Will Open 1,300 Net Stores In 2017

0aagoThe phrase “retail apocalypse” caught a lot of traction throughout 2017 due to the heavily publicized pileup of bankruptcies and store closures. But according to industry analysts and recent data, the buzzword ranges anywhere from an exaggeration to an outright false representation of the state of retail. An IHL Group report is supporting this notion as well, calculating that physical retail is actually growing.

U.S. retailers and restaurants are opening 4,080 more stores in 2017 than they are closing, and plan to open 5,500 more in 2018. Core retail segments will see a net gain of 1,326 stores throughout the year, while table-service and fast-food restaurants are adding a net 2,754 locations.

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As many as 42% of retailers are showing a net increase in stores in 2017; only 15% have a net decrease and 43% report no change. The report, titled: Debunking The Retail Apocalypse, found that for every chain with a net closing of stores, 2.7 companies showed a net increase in store locations for 2017. The research analyzed more than 1,800 retail chains with more than 50 U.S. stores in 10 retail vertical segments.

The three fastest-growing core retail segments are the “usual suspects”: mass merchandisers such as off-price retailers and dollar stores (1,905 added stores), convenience stores (1,700) and grocery retailers (674).

One reason for the spate of “retail apocalypse” headlines may be that a select few brands — including some very high-profile names — have performed poorly in recent years. In fact, only 16 chains account for 48.5% of the total number of store closings. Five of these chains (RadioShack, Payless ShoeSource, Rue21, Ascena Retail and Sears Holdings) represent 28.1% of the total closures.

Specialty apparel retailers are seeing the largest number of closings, with a net loss of 3,137 stores. Yet for every apparel chain closing stores, 1.3 chains are opening new stores.

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