February 26, 2018
As 2017 winds down, the traditional retail industry closes out a troubled year with a robust holiday shopping season. Even so, predictions for 2018 look bleak at best for brick-and-mortar stores. The strong finish might not be enough to save struggling retailers. The new year could bring more of the same when it comes to lackluster sales.
Shoppers say they like shopping online and even on their tablets and smartphones. Amazon shares jumped 55 percent in 2017.
Bankruptcies and announcements of store closings hit a record of 7,000. BankrupctyData.com reported an increase of 30 percent from 2016 to 2017. Some of these were small businesses but dozens of national chains suffered the same plight, including Rue21, Gymboree, Payless Shoes and Toys R Us. While these four retailers managed to stay open, Radio Shack shut the doors of nearly all locations after a second bankruptcy and the Limited closed all stores.
At the same time, unemployment fell to a 17-year low, and two million workers found jobs. However, the retail sector took a sharp hit, losing 36,000 jobs.
Some experts claim that this is a normal evolution and not a “retail apocalypse.” Mall occupancy rates stand at about 93 percent, which shows a strong presence, despite the close of some anchor stores from retailers including Macy’s, J.C. Penney and Sears. Some job losses, such as increased automation, a reduction in retail expenses and an increase in self-checkout lanes, might have occurred apart from a drop in retail.
At the same time, brick-and-mortar stores are moving employees to online services, such as logistics or warehouse jobs instead of face-to-face contact with customers. Finally, consumers are more financially savvy than ever and can comparison shop in the store or online, affecting buying decisions.
The 2017 holiday shopping season was expected to increase by about 4 percent over last year’s sales. After the holidays, more store closings might be announced, depending on the final numbers.
Both businesses and individuals go through financial ebbs and flows. Despite your best efforts, you might have run into economic difficulties that you can’t overcome. A knowledgeable bankruptcy attorney can help you navigate these challenges and make wise decisions to set you on better course for the future.
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