Report on store closings 2008/2009

[disneysteve]

I heard a report on the news yesterday about retail stores closing and the numbers were pretty significant. They said that about 160,000 stores will have closed in 2008 and they expect about 200,000 more to close in 2009. They anticipate about 2,000 entire shopping malls and shopping centers to shut down in 2009.

The one analyst did say that the US has way too much retail space, even after the 2008 closings. He said we have twice what we need. I've often said that there are simply way too many stores so maybe all of these closures will actually be a good thing in the long run. It will reduce competition and improve sales for the places that remain.

I live within a 15-20 minute drive of 5 major indoor shopping malls, 5 Target stores and 4 Wal-Marts. Is that really necessary? And that's not even mentioning literally thousands of other stores within that same radius.

I think the bottom line will be that you'll be seeing a lot of vacant retail space by this time next year.

[Snave]

[QUOTE=disneysteve;200020]

I live within a 15-20 minute drive of 5 major indoor shopping malls, 5 Target stores and 4 Wal-Marts. Is that really necessary? And that's not even mentioning literally thousands of other stores within that same radius.

QUOTE]

Clearly Target and Wal-Mart see that it is necessary and that is why they built the stores. I agree with you though. It is just like Starbuck's. They seem to be built so close together!

[jIM_Ohio]

Some franchises do not control how close one of their brands is to another.

I have been to some places where there are 3 Wendy's within 5 miles of one another, all with same zip code. McD's is even worse.

Many of the stores at the mall are probably owned or operated by the same company... each just has a different brand name inside the store.

This should help the small private business owner some.

The biggest problem is the people investing in the real estate (owns the store space at the mall) will now make less money.

[disneysteve]

Clearly Target and Wal-Mart see that it is necessary and that is why they built the stores.

I don't think it works, though. My wife used to work for Sports Authority. She worked at the only store within 25 miles and they were always busy. People came from all around to shop there. Then another location opened about 10 miles away and they saw their sales dip. Then they transferred her to another new store about 10 miles in the other direction (and in another state). They were booming for a while, until yet another new store opened several miles down the road. Then sales dropped off and they had to keep cutting staff hours.

Every time a new store opened, existing store sales fell. I realize that total sales probably rose but were spread out over more locations. What happens over and over, though, is that chains expand and expand and expand until they cannibalize their own business so much that the stores end up closing. I've seen it happen many times.

No matter what Gordon Gekko said, sometimes greed is bad.

[disneysteve]

Some franchises do not control how close one of their brands is to another.

I have been to some places where there are 3 Wendy's within 5 miles of one another, all with same zip code. McD's is even worse.

Very true. I knew a guy years ago who owned a fast food restaurant franchise. It was a gold mine, made a ton of money. Then corporate decided to open another one right down the road. His sales dropped almost in half. He had to cut staff and reduce hours to stay in business.

[Goldy1]

There is so much shopping around me that it is insane. How many places do you need to buy toilet paper or new dishes? I remain loyal to a couple and do not frequent the rest. Home Depots like one or two miles down the road from each other.

They remodeled a local Meijer and cut staff hours to pay for it. Now there are like 8 self check outs instead of 2 or 3 also. Not to mention the natural beauty compromised.
This one shopping mecca street over here has stores behind stores ie. a Borders in front of a Staples. IT also has restaurants in these parking lots, and they recently bulit strip malls in these parking lots. Concrete jungle.

Oh and oen of the biggest malls in the state just had a new outdoor shopping mall(like this upscale walkable outdoor "mall") open a couple miles from it, and it's in Michigan and doing well???? lol.

[disneysteve]

How many places do you need to buy toilet paper or new dishes?

The one that always baffles us is the mattress stores. Years ago, if you needed a new mattress, you went either to a furniture store or a department store with a furniture department. Now, around here at least, there is a mattress store in virtually every shopping center. Drive down the main drag and you will pass 8-10 mattress stores in the course of a few miles. Are there really that many more people buying that many more mattresses than they did years ago?

[mom-from-missouri]

This should help the small private business owner some.

The biggest problem is the people investing in the real estate (owns the store space at the mall) will now make less money.

In rural areas though, all we have are the small private business owners. We have lost our resturant, lumber yard, bead/jewerly making store/antique stores...leaving very little on our Main street, which is only 2 blocks long to begin with (and we are the county seat).

The bigger stores we visit in the city are also leaving-circuit city, big lots, 1 home depot, the christian family bookstore, sonic, the chev dealership where I got my car, the hardees by my husbands work....

I attend a small church of around 80-90. We have about 27 people right now who are either laid off or work in a place that has told them they are closing in the near future.

[Goldy1]

I noticed a lot of Bigby coffee shops popping up in my area. I don't frequent any coffee shop anymore, but I heard Starbucks isn't doing so great due to high prices and they are cheaper.
I see these stores open that I know will close ie. Scrapbook Nook etc. lol It's all "big box" now. One store I kow closed around here is Cost Plus World Market. It was similar to Pier One. AGain, nothing there you couldn't get 12 other places I suppose.

An old memory is the good ol' Service Merchandise as a kid where you would order a clock or something and pick it up on the conveyor belt. lol

[disneysteve]

An old memory is the good ol' Service Merchandise as a kid where you would order a clock or something and pick it up on the conveyor belt. lol

Yep. Around here, we also had Basco, which later became Best. Same concept, though.

[MoneyTrev]

I noticed a lot of Bigby coffee shops popping up in my area. I don't frequent any coffee shop anymore, but I heard Starbucks isn't doing so great due to high prices and they are cheaper.

Many places have opened their own competitor franchise against Starbucks. I remember going back to Taiwan this year, I saw many 80C coffee shops and my friend told me that they were competitors with Starbucks and are a phenomenon because they did so well with Starbucks dominating the market in Taiwan before they started.

To me, coffee all tastes the same if its made right.

[disneysteve]

To me, coffee all tastes the same if its made right.

I'm not a coffee drinker, but even I know that isn't true. That's like saying all colas taste the same or all beers or all wines. The description that I hear over and over is that Starbucks' coffee is very bitter, which apparently a lot of people like, but I also know many people who won't go there for that very same reason.

[tulsa_sr5]

I too have been baffled by all the new strip mall construction over the last year. The other downside I see is that older strip malls seem to really get bad before getting scraped.

Anyone else notice all the new banks popping up over the last couple years too? One intersection in town had one on 3 of the 4 corners, two of them less than a year old, and neither were names I'd ever heard of.

[MiikeB]

I agree 100%

There is a gamestop inside the mall here and another in the strip mall thats attached to the mall parking lot. Another mall has 3 starbucks locations inside it.

[disneysteve]

The other downside I see is that older strip malls seem to really get bad before getting scraped.

The other related problem is that when a new center opens, some stores move from the old center to the new center, sometimes literally next door to each other, leaving vacancies in the old center that may never get filled. One Home Depot near us moved a few hundred yards (walking distance) to a new center. That was a couple of years ago. The old store is still vacant, and that's a big property to be sitting empty.

There is a gamestop inside the mall here and another in the strip mall thats attached to the mall parking lot. Another mall has 3 starbucks locations inside it.

The other thing we are overrun with is cell phone stores, stands and kiosks. Most malls around here have at least 6 cell phone stores, including 2 or 3 from the same company. It is ridiculous. If you want to get an AT&T phone, is it really to much to ask that you walk to that section of the mall? Do you really need there to be an AT&T store in each wing and on each floor?