US retailers could announce between 20,000 and 25,000 closures in 2020.
The fallout to the coronavirus pandemic could see as many as 25,000 store closures announced by retailers this year, as the crisis takes a toll on many businesses and pushes others into bankruptcy.
According to Coresight Research, U.S. retailers could announce between 20,000 and 25,000 closures in 2020 with 55% to 60% of those located in America’s malls. That would mark a new record in the rapidly changing retail sector—the previous record, set in 2019, was just over 9,300. The news is doubly concerning when one considers that Coresight had predicted just 15,000 closures earlier this year. In many ways, the phenomenon is merely a speeding up of the decline of the traditional retail industry already underway pre-Covid. There are not many retailers still growing via bricks and mortar today. And if they are, many are looking to downsize to smaller locations.
In recent weeks, however, bankruptcy filings in retail have begun to increase with household names such as Neiman Marcus, Stage Stores, and J.C. Penney among them. Some of these retailers will close some stores and begin operating again. Stage Stores has warned it may need to shutter all of its stores if it doesn’t find a buyer. And the worst is still to come. Coresight has, so far, recorded a total of 4,005 announced closures by retailers in 2020, merely a fifth of the predicted eventual number.
“We expect that a return to pre-crisis levels in offline discretionary retail sales overall will be gradual, as we expect consumer confidence, demand and spending to be short of normal for some time,” Coresight founder and CEO Deborah Weinswig said in the report. “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 and could end up closing a number of stores.”
Elsewhere, eMarketer is forecasting total retail sales in the U.S. to fall more than 10% in 2020 and that they won’t bounce back to pre-Covid-19 levels until 2022. E-commerce sales, on the other hand, are expected to surge 18% this year.