Retail Store Closings…

Predicting 75,000 Stores Will Be Forced To Close By 2026

Pamela N. Danziger

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(AP Photo/Paul Sakuma)

(AP Photo/Paul Sakuma) ASSOCIATED PRESS

The next seven years are going to be tough for retail. A sweeping restructuring and downsizing of physical retail will occur through 2026, as the penetration of online retail rises to 25% from its current 16% market share. Called “store rationalization” in an analysis from UBS, it finds that with each 1% increase in online penetration, some 8,000 to 8,500 stores will need to close.

At its current rate that means some 75,000 stores will be forced out of business by 2026, or about 7% of the 1,044,754 retail establishments in the U.S. today, according to data from the Bureau of Labor Statistics.

The sword will fall unevenly depending upon the retail sector and the rate of penetration online sales are expected to have.

Clothing stores will take the biggest hit, losing an excess of some 21,000 stores out of the current 82,200, or some 25%. Consumer electronics stores will drop by 10,000 stores, or 25% of the 39,000 currently standing.

Home furnishings will lose 8,000 stores (32% of its current 25,300) and home improvement stores will drop by 1,000 (about 7% of the nation’s 14,500 hardware stores).

And the number of grocery stores will fall by 7,000, or 8%, from current 89,500 levels, if online penetration rises to 10% from its current 2% level.

Pace of closing will accelerate

With 75,000 stores closing over the next 7 years, that translates to nearly 11,000 stores shuttered per year—or nearly double the rate of store closures recently.

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