An Expected 80,000 Retail Stores to Close by 2025

That’s the equivalent to seven Toys ‘R’ Us chains.

April 30, 2018

NEW YORK – Data from UBS show that an overwhelming amount of retail stores will need to close in the next few years to satisfy the declining consumer demand for in-store shopping. If e-commerce sales reach 25% of all retail sales by 2025, anywhere from 30,000 to 80,000 retail stores would need to close to maintain single digit total yearly retail sales growth.

Currently, e-commerce amounts to 16% of total retail sales (excluding food and gas). This is up from 8% in 2014 and amounts to the average household spending $4,600 online. But this shift away from shopping in brick-and-mortar stores has set significant demands on retailers to either shift strategies or close their doors.

For each 100 basic point increase in e-commerce sales, an additional 9,000 stores would have to close to maintain existing sales levels. If online retailers ramp up to expand offerings and convenience, this means an equivalent of seven Toys ‘R’ Us chains could eventually close its doors. If retail sales rise by 3% each year, experts expect only 27,000 stores need to close to maintain equilibrium.

“This suggests that closures of underperforming stores would need to accelerate in order for the group to return to a higher store productivity growth rates,” the report said.

Advertisement
Advertisement
Advertisement