Just as retail store owners across the United States are slowly beginning to reopen or at least contemplating reopening, a Coresight Research report released this week outlines dour prospects for the retail sector overall. Brick-and-mortar stores, after years of losing share to online stores, have been devastated by the outbreak of the novel corona virus, COVID-19. Retail sales plunged more than 16 percent in April, as the majority of U.S. retailers shuttered stores.
Coresight founder and CEO Deborah Weinswig explained, “Given that recovery to pre-crisis levels may be gradual, retailers that were struggling to stay in business pre-crisis are unlikely to have the wherewithal to stay the course on the road to recovery.”
According to the National Retail Federation (NRF), there are over one million retail establishments across the country. Coresight expects that between 20,000 and 25,000 of these stores will close by year-end. Furthermore, the firm, which specializes in deriving data-driven insights impacting the retail and technology sectors, expects half to 60 percent of 2020 store closures will occur in malls.
Malls are especially vulnerable since once one big mall-based store – an anchor store – fails, it can take several smaller stores along with it as overall mall foot traffic drops. Some retailers go so far as to negotiate lease terms that allow them to get out of the lease if a mall anchor store closes.
If Coresight’s projections prove out, 2020 will mark at least a doubling of retail closures compared to last year, when just under 10,000 stores closed. Prior to the outbreak of the corona virus and the recession it unleashed, Coresight estimated that 15,000 U.S. stores would close in 2020. In other words, COVID-19 is expected to increase the number of 2020 store closings by at least a third, and possibly by as much as two thirds.
Meanwhile, many eCommerce businesses report modest to strong increases in sales since the COVID-19 outbreak. Among the winners is Phoenix-based Kitchen Enthusiasts, Inc., owner and operator of the Butcher Block Co., which specializes in kitchen counter and island tops; kitchen tables, islands, and carts; plus cutting boards and chopping blocks. According to the company’s Vice President of Marketing and Operations, Kathleen Grodsky, “Online traffic, transactions, and sales volume are running about double year-ago levels. With so many families dining in as a result of stay-at-home directives, demand for baker’s tables, cutting boards and chopping blocks, in particular, has been through the roof.”
This eCommerce industry news update is presented by the Butcher Block Co., which sells premium wood countertops plus a broad line of kitchen furniture and cooking accessories.
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