Despite Strong Economy, 2019 Proved To Be Painful Year For Retailers
NORTH TEXAS (CBSDFW.COM) — Despite a strong economy, 2019 proved to be a painful year for American retailers.
The group Coresign Research reported more than 9,300 stores closed nationwide, which is a 59% jump from 2018.
This year, major chains such as Payless, Gymboree, Shopko and Charlotte Russe filed for bankruptcy, which account for 40% of the closings, Coresign Research found.
Other companies such as JC Penney and Walgreens shuttered stores in order to slash costs. Even booming retailers like Best Buy and Wal-Mart closed a handful of locations.
But according to financial expert William Dendy, some chains fared better in Dallas-Fort Worth compared to other places in the country.
"We seem to be in the epicenter of economic growth and we're not seeing as many store closings," said Dendy, who is a CPA, as well as an attorney and professor at Southern Methodist University. "We have enough economic strength."
It's no secret why traditional habits have changed. The decline of brick and mortar can be linked to online retailers like Amazon that offer convenience and competitive deals.
But researchers found online sales only make up 16% of today's retail purchases.
"There are some things people won't buy online. It comes down to shopping experience," Dendy said.
Dendy argues brick and mortar is far from extinct. He said the future of shopping lies in experiences. He pointed to stores such as Apple or Nike, that allow customers to test the product in person before buying.
Dendy also said "native" online business, such as Warby Parker, have started opening locations because the physical presence drives online activity.
"It's not an apocalypse, it's a shift," he said.
The report estimates 75,000 more stores could close by 2026.
But there are outliers. Dollar General announced it will open an additional 13,000 locations nationwide.
Discount chains like Five Below and Aldi are also planning to expand.