The headlines toll the ‘death of retail,’ but the data suggest an industry in transition but still growing. The most recent retail sales figures released by the Census Bureau were up a robust 4.2 percent year-on-year in July. Every month this year has seen a steady increase in sales over the same period last year.
And now IHL Group has published a report that shows a net increase in store openings of over 4,000 in 2017. In fact, for each company closing a store, 2.7 companies are opening stores. Across the broad spectrum of retail sectors, IHL Group’s data shows that none are closing more stores than they are opening. Even in the supposedly beleaguered department store sector, just as many businesses are opening stores as are closing them. According to IHL’s data, 751 brands are increasing their store counts versus 278 that are reducing store counts. On a percentage basis, 42 percent are opening stores, 43 percent are holding steady and only 15 percent are showing a net decrease in stores.
“When you look at individual sectors, businesses or regions there are clearly areas that are challenged. The fallacy occurs when one looks at those exceptions and extrapolates them to represent the norm,” says Mark Mathews, Vice President research analysis for the National Retail Federation. “Every industry experiences turnover and change and companies are consistently having to adapt their business models to new realities.”
Retail is no different, says Matthews. Consumer behavior, abetted by technology, is forcing retailers to adjust to this change at a speed that is unprecedented. “In this sort of environment, some businesses will struggle but others will adapt and exciting new businesses will spring up to take the place of those that can’t,” he continues.
“What remains clear amidst all this noise is that the store is as relevant and important a part of the retail experience as it ever has been,” Matthews argues.
The IHL data makes this case quite clearly and the consumer is telling us the same thing. Almost 80 percent of shopper surveyed by IHL say they are visiting stores as frequently or more frequently than last year. Interestingly, this number goes up by 5 percent when you sample Millennials and Gen Z.
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