Is the retail apocalypse over? A new report points in that direction.
In 2019, five retail stores open for every one that closes, according to a study released this week by global research and advisory firm IHL Group.
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Of the 1,660 chains reviewed by IHL, 1,065 of them opened new locations this year — representing a 56% increase over 2018.
Meanwhile, store shutdowns were concentrated among a small number of retailers, with 20 companies accounting for 75% of all net closings in 2019. Bankrupt Payless alone represents more than one-fourth of all downsizing, with 2,354 closures.
Although 2018 saw a peak in the amount of chains shuttering stores, the report indicates a shift away from the shutdown trend: So far in 2019, there has been a 68% drop in closures.
In the apparel/department store category, 3.7 stores have opened for each one closed this year. Through June, retail sales on the whole are up by 3.1%. However, department stores continue to struggle, with sales down 4.3%.
Long a bright spot amid retail woes, the discount category has continued to see widespread growth this year, particularly Dollar General and Dollar Tree, with 975 and 500 openings, respectively.
But growth in the off-price channel may be slowing down somewhat, per a report from UBS. The financial services firm says opportunities for increases are dinging the sector due to increased competition, competitors offering lower-priced product and Amazon taking market share.
IHL studied 1,660 chains, each with 50+ locations in the U.S. The full report is available free of charge here.
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