Retail apocalypse: Can the US retail trade be saved?

The shopping mall has for decades been the pulsing heart of the US consumer economy, drawing shoppers in their millions. But now online shopping — or e-commerce — has pushed the sector into crisis, with Amazon leading the way. The demise of the vast shopping centres means the disappearance of the social stomping grounds where families strolled and window shopped and young people met.
It also means the loss of many jobs. Are there any grounds for hope?
Away from the city centres along the freeways there is the increasingly common sight of deserted rows of shops, crumbling plaster and emptiness.
Where not long ago shopping centres did a roaring trade a ghost town atmosphere prevails in what is being termed a “Retail Apocalypse.”
Observers predict worse to come, seeing the shift to online shopping as just beginning. Whereas people once wandered through these temples to consumerism looking at the goods, they are now ordering online.
Amazon in particular now has virtually everything in its range that supermarkets and department stores once offered.
Despite a booming US economy, the retail sector is in dire straits.
Icons of the US shopping culture like Macy’s have cut back on staff and branches in large numbers. Founded in 1858 and a firm part of US tradition, the company has begun disposing of valuable real estate in a bid to stay above water.
Its rivals, like Kohl’s or JC Penney’s, and even more broadly based chains like the giants Walmart and Target, are also feeling the heat generated by Amazon.
Things are even worse at Sears.
The famous department store chain is beset by rumours of looming bankruptcy.
Toy-maker Toys R Us filed for bankruptcy in 2017 — part of a trend that has seen chains like Payless, Gymboree and Perfumania seek protection from their creditors.
Electronics chain RadioShack and Sports Authority have already closed up shop completely. This could be merely the beginning.
Commercial analysts CoStar Group believes that more than 10 per cent of retail surface area in the United States could become superfluous over the next few years, with the major shopping centres worst hit.
Credit Suisse analysts foresee up to a quarter of the space given over to retail closing down within five years.
A long-term decline in department stores and classic retail would pose a major threat to the US economy with far-reaching social consequences.
According to the National Retail Federation (NRF) up to a quarter of all jobs indirectly depend on the sector and 11 per cent directly.
Many of these are low-paid jobs and important for the fact that they provide employment to many people without professional training at a high level.
In November there was a glimmer of hope, when 12,900 new jobs were created in traditional retail. “That was one of the strongest increases that we have seen this year,” NRF economist Jack Kleinhenz said.
But the start of the Christmas shopping season with its discount wars traditionally sees increased demand for retail workers, and the short-term trend is deceptive.
According to the Department of Labour, more than 70,000 jobs have been lost since January. And the road ahead is increasingly clear, as shown by the consumer rush around the Thanksgiving holiday.
On “Black Friday” and “Cyber Monday” US consumers spent more than ever before according to market researchers Adobe Digital Insights — largely thanks to a new record posted by online shopping. — dpa

Hannes Breustedt