If you’ve been paying attention at all to recent economic reports, you’ve likely been reassured that things are heading in the right direction.
More people are employed than ever before and incomes are on a steady rise. But there is an economic crisis going on right now that you might not be aware of. The statistics don’t really tell the whole truth - unless you are willing to dig a little deeper.
But, truth be told, for some Americans, the direction the economy is headed is not good news - at least in the short term. The latest news on that front making the already-difficult financial situation of lower-income families even more challenging.
And the name of this economic crisis? The Retail Apocalypse. But don't let the catchy title mislead you; it brings small comfort to those whose lives are negatively impacted by this new reality.
“The retail apocalypse is the closing of a large number of North American brick-and-mortar retail stores, especially those of large chains, starting in 2010 and continuing onward.”
Each year it seems more and more neighborhood retailers are shuttering their doors in the wake of the changing way in which people conduct commerce.
And while it may be good for the economy in the long run, it is bringing devastation to those who have relied on these businesses for buying food and other products for their families.
And now we're learning that ‘Family Dollar’ plans to close 400 of its stores and rebrand another 200. Family Dollar is one of several discount retailers that typically sell everything for one dollar or less. Some great deals can be found there and low-income families reap the benefits.
“Major department stores such as J. C. Penney, Macy's, Sears, and Kmart have announced hundreds of store closures, and well-known apparel brands such as J. Crew are unprofitable.”
It seems the moderately-priced retailers are feeling the pinch more than the others. The exceptions are Wal-Mart and Costco.
“More than 12,000 stores are expected to close in 2018, and only 4,000 of them have been planned by several retailers. Several retailers such as Toys ‘R’ Us liquidated and closed all their stores.
Charlotte Russe and Payless Shoes will soon be added to that ever-growing list.
And why are so many of our favorite stories failing after having enjoyed so many years (and in some cases, decades) of growth and success?
According to economists, there are many factors, but one seems to be mostly responsible for stemming the tide of these businesses’ former success.
“The main factor cited in the closing of retail stores in the retail apocalypse is the shift in consumer habits towards online shopping.”
“Can anybody explain to me why so many retail stores (Kohl’s, Family Dollar, Victoria Secret, Payless) are closing numerous stairs during this so-Called booming economy???”
“Most definitely a movement towards online shopping. Blockbuster didn’t close because of the economy, it closed because of the change in the way people watch movies.”
Admit it, isn’t Amazon your first 'go-to' when shopping for Christmas? Who wants to fight the shopping mall crowds, right? Certainly, no one can blame the individual for doing what he thinks is best for his family.
But experts are saying that the millions of individuals add up to a giant headache for existing physical retailers.
“North American consumers have shifted their purchasing habits due to various factors...as well as the rise of e-commerce, mostly in the form of competition from juggernaut companies such as Amazon.com and Walmart."
“In the second half of 2017 and throughout 2018, the media and analyst community began recognizing retail as an industry in transition, rather than demise.” That seems to indicate that things will straighten out eventually, after a painful short-term adjustment.
But, please don’t lose heart. It’s not all bad news.
“In June 2018, SeekingAlpha wrote that 90 percent of purchases are still made in stores, and except for Amazon.com, “the top ten retailers are brick-and-mortar operators: in order, they are Walmart, Kroger, Costco, Home Depot, CVS, Walgreens, Amazon.com, Target, Lowe's and Albertsons.”
Primarily, it’s a matter of ‘the weak’ falling to ‘the strong.’ Poor management, high debt-ratios, and poor long-term goals have also contributed to the decline in the success of some businesses. And, for the unlucky few, things have gotten so bad, they have no other choice but to liquidate.
For Family Dollar, however, there may be a small light at the end of the tunnel. Yes, 400 stores are closing but the other 200 are staying; they will just be rebranded as 'Dollar Tree.' Good news for about one-third of the people affected.
So hang in there! Things won't always be this bad. The change will be for the better, and when we look back on this time, we'll realize that it was merely the natural progression of the ever-changing times.