Doom and gloom often surrounds discussion of brick-and-mortar retail. It's hard not to see the demise of traditional stores like Sears and Toys 'R' Us as bellwethers for the industry. Many stores are closing locations, but is it as dire as it seems on the surface?
Not across the board. According to recent analysis by IHL Group, all retail segments in North America, except department stores, are opening more stores than they are closing. There has been a net increase of 2,570 retail stores—excluding restaurants, which have experienced even more openings—in the past two years.
This charge is being led by superstores and warehouse clubs where 83% of this segment are opening stores in 2018, while only 17% are closing them. (Convenience stores are an anomaly since oil companies don't always break out retail from gas stations.) Taking food, drug, convenience, mass merchants/warehouse (FDCM) as a whole, 3.7 stores on average are being opened for every one that is shuttered.
Mall-based stores including department stores, the traditional anchors, as well as specialty stores had narrower opening-to-closing ratios. Department stores experienced negative growth; 36% were closing stores while 26% were opening, according to the IHL Group analysis.
According to the eMarketer Retail Database, Sears had the largest decline in retail store sales growth (23.1%). Additionally, Bon-Ton Stores (9.1%), Macy's (8.0%), JCPenney (4.5%), Neiman Marcus (2.7%) and Nordstrom (1.0%) all experienced decreases while Kohl's remained flat.