Nothing in my previous articles about changing car buying habits, housing trends or dining out should come as a surprise to anyone. All of the things discussed in those articles are coming to pass in some form. Next up is the retailing segment. What we expect to happen here closely parallels what we anticipate happening in the restaurant sector.
We have already seen Circuit City and Linens N Things go completely out of business. This is largely due to the direct competition and better brand of Best Buy and Bed Bath amp; Beyond. These will likely not be the last chains to take their signs down. Who will be next? Look for stores that primarily occupy malls. Mall traffic is down substantially and several anchor stores have left certain malls and the smaller stores just can't get by with the reduced traffic that comes from losing an anchor. Malls have saturated the American landscape for decades and they built too many of them. Some locations will not be able to support a mall and some won't be able to survive in their current form. The Orange Blossom Mall in Ft. Pierce, FL was not able to survive after the newer Indian River Mall was built. It is now a county administration facility. The Palm Beach Mall was the first of it's kind in the Palm Beach, FL area. Now the tenants are gradually leaving as the mall's owners are mulling different options to utilize the space in the future. The nearby upscale Wellington Mall and Gardens Mall helped seal it's fate. What about the home improvement segment? Lowe's and Home Depot aren't going away any time soon, but they will not grow as quickly as they once did nor will they be as profitable. Both companies will likely focus on their best locations and may consider exiting less profitable areas. Essentially large retailers will start closing locations that aren't viable in the new economy and will try to get their operations to where they can be profitable. The previous economy was pumped up by credit cards and there will be a hangover for several years in the retail sector. Shopping will be more for necessities than any time since the Great Depression. This will result in a lot of vacant space in America's shopping centers and malls, but it will be a great opportunity for the entrepreneur. In the past decade retail rents rose to a point that only national tenants or franchises could turn a profit. But with the oversupply will come lower rents and this will be a great opportunity for a small business person to get off the ground. This post was done by Adazon USA.
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February 2018
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