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50,000 retail store closures in U.S. by 2026 after pandemic pause


The 2020 pandemic shook up the retail industry, leading to an increase in closings. Many retailers also filed for bankruptcy. vacancies scattered along the streets major markets including New York City.

This was only temporary as the companies used 2020 to rapidly reduce store count when customers were home. Actually, 2021 saw net store openings by retailers, marking an abrupt reversal after years of declining net sales. Companies seized the opportunity to take advantage of cheap rentsAmericans are eager to shop again and have a greater desire to go out.

UBS’s analysts are seeing more pain, however it is not closing as many branches as the investment bank. had initially projected about a year ago.

The bank released a report Wednesday that stated brick-and mortar shops played an important role during the Covid epidemic. It also said retail sales growth was steady due in part to the rising inflation. According to Michael Lasser, UBS retail analyst, this bodes well in the future for physical stores.

UBS projects closing between 40,000-50,000 U.S. retail stores over the next five year period, down from the previous projection of 80,000. The figure is taken from the total 880,000 retail stores UBS monitors nationwide. Gas stations are not included.

Lasser stated in his report that this estimate assumes U.S. retail sales growing at 4% per year moving forward and that ecommerce sales, as a percent of total retail sales, rises to 25% in 2026 from 18% 2021.

UBS estimates that there will be approximately 23500 closures in these three categories, which is roughly 23,500 total, by 2026.

The firm stated that traditional shopping malls are at greater risk than nearby strips centers for closing down. The firm said that traditional shopping malls remain at higher risk than those in nearby neighborhoods due to increased shopper traffic, which is often driven by department store chains.

Meanwhile, general merchandise retailers, such as Target WalmartIn the coming years, net profits are anticipated for auto parts and lubricants businesses.

Lasser’s team estimates that there are still approximately 58 square feet per household of U.S. shopping centers space as of 2021. Although this is a decrease from the 62 sq feet per household in 2010, there are still more than 55 square feet and 49 square footage in 2000.

Lasser stated that consumers are shifting more of their spending to the Internet, so it is only natural that this number will shrink.

Retailers’ plans for opening new stores are outpacing those of their shops closing down, so far in this year. Coresight Research has tracked data that shows U.S. retail stores have only announced 1,385 store closings, in comparison to a record 3,694 open shops as of April 1.

Discount stores and dollar chain discount stores are driving the store growth, such as Dollar General TJX – and also by a wave of so-called digitally native companies that started on the internet but are now seeking acquiring new customers via bricks and mortar. Some examples include Warby Parker, Allbirds, Vuori, Brooklinen and Fabletics.

UBS publishes these close-followed, deep dive store closure reports once every two years.