September 08, 2013
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With the endless growth of Internet and mobile shopping, the oversaturation of bricks and mortar establishments in the US becomes even more noticeable. The trend toward downsizing store size and reducing the number of stores will continue throughout 2013 and beyond.
We may have had an oversaturation of retail well before the 2007 recession started. According to the 2007 Economic Census, there were about 1.1 million retail establishments in the US with over 14 billion square feet of retail space. That’s over 46 square feet of retail space per capita – like a nice-sized closet for every American that exists down the street – instead of in their house.
Most other countries aren’t so flush with space. In India, it averages two feet per person, in Mexico 1.5 square feet; 23 feet in the UK, and 6.5 feet in Australia. Even across the border to the north in Canada, there is an average of only 13 feet. That is one of the reasons we are seeing the recent Canadian Retail Gold Rush.
At the beginning of 2012, Sears announced the closing of over 100 more of its Sears and Kmart stores. More recently, they’ve announced that they’ll continue to cull the herd.
As farmers know; culling makes a herd stronger. In the case of Sears-Kmart; they’ve already taken out a lot of low performing stores. As you would expect, the first to go are stores that in areas that are saturated with their most efficient competitors. That leaves a lot of the remaining, more-feasible stores in areas without competitors like Walmart.
Posted by:Dan Sanker
