Retail stores are shuttering store locations permanently at an unprecedented rate as the coronavirus pandemic accelerates the transition to new selling methods for some companies and forces others into bankruptcy.
As many as 100,000 brick-and-mortar retail stores in the U.S. will close by 2025, according to research by the Wall Street firm UBS. The closures continue the trend in recent years of shoppers embracing other ways to buy, such as e-commerce and picking up products in-store that they bought online. The coronavirus pandemic has hastened many store closures as shoppers opt to avoid gathering in public to protect from the virus.
Nordstrom, Bath & Body Works, Gap, and Zara have announced that they will close some U.S. stores permanently.Â Microsoft will close all of its store locations, both in the U.S. and around the world, the company said. No jobs will be lost from Microsoft’s transition, and the move was reportedly planned for next year, but the pandemic prodded the company to act sooner.
Meanwhile, other companies such as J.C. Penney, Neiman Marcus, and J. Crew have filed for bankruptcy.
Larger chain companies such as Walmart, Target, and Costco, as well as dollar stores and home-improvement stores, could benefit from the decisions to shut down retail locations, while smaller companies will likely be hurt by the transition, according to the USB assessment. Indoor shopping malls will also struggle to remain open, with analysts predicting that around 100 malls with shut down.
Last year, a record 9,800 retail stores closed, and the U.S. is on track to see as many as 25,000 stores close in 2020, according to retail- and tech-data firm Coresight Research.
The retail sector bled 1.2 million jobs between March, when lockdown orders were implemented in many states, and June, according to data last week from the Department of Labor.