One of the most worrying situations in terms of national economy is related to retailers in the United States. Sadly, this sector of the economy, fundamental to American society, has been filing for bankruptcy at a rate not seen before, not even during the most severe economic crises of the last century. 

Although the big retailers do what they can to recover thanks to online sales (especially to reduce costs due to the optimization of space and distribution,) it seems that the bankruptcy of this whole sector is simply imminent since a great number of chains have demonstrated their low adaptability to the demanding environment of electronic commerce which, by the way, completely alters the logic of selling and buying, as well as the supply chains themselves.

It’s really worrisome: So far this year, more than a dozen chains have filed for bankruptcy, or have sought to restructure their debts with their creditors. This means that in less than a year, the number of such cases has exceeded the number of the whole previous year. It may be too soon to find the causes of this particular economic phenomenon, but it is likely that the root of the problem lies in the existence of a bubble regarding the oversupply of stores and malls across the country.

Of course, there are diverse opinions on this economically controversial topic. Some claim that the cause is actually multiple, consisting of simultaneous phenomena. The first, and, of course, the most important, is the excessive amount of residual space. For almost thirty years, retailers have rented properties at a strenuous pace with the aim of having as many points of sale and distribution as possible – and this, precisely, is the origin of the bubble. This has raised the prices of renting to the clouds, even in spite of the oversupply of premises in thousands of malls throughout the country, and at the same time (almost as a direct consequence,) the sales per capita decreased considerably.

On the other hand, it is a fact that consumer spending is no longer the same as that of twenty or thirty years ago (not even of a decade ago.) A domino effect has been produced in which some causes, as determinant as the global economic slowdown, the rising inflation rates, the falling oil prices, the economic policies of President Trump, and the crisis in the shipping industry worldwide (to name a few) are present. The effects are reflected in the declines sales of, for example, clothing stores in malls across the country, which, after months of storing inventories, are forced to lower the prices from time to time.

Image courtesy of Kessop at Flickr.com

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Now, why does this happen? Well, just take a look at social networks to note that a growing trend in today’s young consumers is to stop buying clothing, vehicles, properties, and other emblematic goods of success for previous generations. An average consumer prefers to travel for six months in Europe or South America than buying a Gucci watch. Nowadays, experiences in consumption are more prevalent than objects themselves.

In addition, it is important to consider certain e-commerce trends which make consumption even more liquid. Many people prefer to buy items (new or used) by eBay or Amazon that will be delivered to their homes. This, for example, has changed the way people buy and sell books in the United States, to the point that in some cities it is virtually impossible to find an old-school bookstore.

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Nevertheless, some people do not believe that there is such a thing as a general and imminent crisis of retailers in the United States. Paula Rosenblum published an article in Forbes in May this year called “Five Reasons Why ‘The Retail Apocalypse’ Is A False Scare Story.” This article raises a series of arguments openly contradictory to those defended by so many experts on the subject. In her article, Rosenblum states that numbers do not lie: Not only, she says, is a irrefutable evidence that retail sales so far this year have experienced an increase of 4.1% compared to the first quarter of the previous year, but actually it has been registered a large number of outlets opening this year – even in new malls, – and, furthermore, retailers are doing everything as possible to make the process of shopping, in fact, an experience. She mentions as an example the Aventura Mall, which is building a huge section that will not only include stores, but “restaurants, contemporary art, a food hall, and a VIP lounge,” so that consumers can spend their time in the malls.

It is impossible to predict the future fully. However, the study of current trends suggests that drastic changes in trade will occur in the coming years. The Internet has been changing everything (and it’s not the only factor here.) Although retailers are unlikely to disappear altogether in the future (even Amazon has opened physical bookstores in which it sells its most successful books,) the commercial landscape of the United States and the world will be transformed.

* Featured Image courtesy of ep_jhu at Flickr.com