Ecommerce Sales Growth = 80,000 Stores Will Close Over 5 Years, Report Says

The pandemic has already destroyed stores across the country. What’s next couldn’t be easier for retailers.

The pandemic has accelerated the shift to online shopping, and continued growth in online sales will lead to more store closures after the pandemic subsides, UBS-led retail analysts predicted on Monday. by Michael Lasser in a report. The report estimates that around 80,000 stores will close over the next five years.

The scenario presented by UBS is still an improvement over an earlier published prediction. Last April, UBS analysts estimated that 100,000 retail stores would close by 2025. That brought the expectation down to 80,000 closures by 2026 – not because analysts see e-commerce having less impact, but because they now expect more stores to be used. to meet online delivery and curbside pickup orders as e-commerce booms.

The apparel, consumer electronics, home furnishings and sporting goods sectors will close the most stores during this period, analysts said. They believe that the number of malls in the United States will also decline over the next five years.

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“A lasting legacy of the pandemic is that online penetration has risen sharply,” analysts said. This “will lead to further rationalization of retail stores”.

E-commerce sales have grown from 14% of total retail sales in 2019 to 18% in 2020. UBS expects it to reach 27% of retail sales by 2026.

In the worst-case scenario, if e-commerce sales increase to 30% of retail sales by 2026, nearly 150,000 stores could close, analysts say.

However, not all store types will be hit equally hard by the growth of e-commerce. Closures in the grocery, home improvement and auto parts sectors will be “modest”, analysts predict. Indeed, online shopping is less common for these products.

Certainly, some companies are opening new stores, especially discount chains.

Dollar General said last month it could open 17,000 new stores in the future. Dollar Tree, Burlington Stores, Five Below, TJ Maxx, Aldi and others also plan to open new stores.