Re­tail In­dus­try in tran­si­tion, but still grow­ing.

Perfect Sourcing - - Cover Story -

Spec­u­la­tion is rife across the world that re­tail stores are rapidly clos­ing ow­ing to a ma­jor in­crease in on­line sales. How­ever, there are al­ways two sides to a coin and lat­est re­ports and re­search sug­gests that that no mat­ter what, con­sumers still en­joy shop­ping at re­tail stores and this has re­sulted in good growth for all re­tail stores across the US and UK. • The most re­cent re­tail sales fig­ures re­leased by the Cen­sus Bureau were up by a ro­bust 4.2% year-on-year in July. A re­port by global re­search and ad­vi­sory firm IHL Group 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. • Ac­cord­ing to IHL’S data, 751 brands are in­creas­ing their store counts ver­sus 278 that are re­duc­ing store counts. On a per­cent­age ba­sis, 42% are open­ing stores, 43% are hold­ing steady and only 15% are show­ing a net de­crease in stores.

• No doubt chang­ing con­sumer be­hav­iour is an area of con­cern, but this does not in­di­cate that growth will not hap­pen. Stores are and will re­main rel­e­vant and an im­por­tant part of the re­tail ex­pe­ri­ence as it has al­ways been. • Ac­cord­ing to IHL, spe­cialty ap­parel re­tail­ers are see­ing the largest num­ber of clos­ings, with a net loss of 3,137 stores. Yet, for ev­ery chain clos­ing stores, 1.3 chains are open­ing new stores. There are over 1 mil­lion re­tail es­tab­lish­ments across the US and re­tail sales have been grow­ing at al­most 4 per cent an­nu­ally since 2010.

• Dol­lar Gen­eral alone plans to open 1,000 stores this year and many more re­tail­ers are ex­pand­ing.

Re­tail is gen­er­ally mis­un­der­stood to be dom­i­nated by big busi­nesses. The truth is that 91% of re­tail busi­nesses have fewer than 20 em­ploy­ees. An in­crease in that num­ber to 100 em­ploy­ees cap­tures 98% of all re­tail busi­nesses. These com­pa­nies that make up the back­bone of the US tend to be over­looked as the me­dia nat­u­rally fo­cuses on the hand­ful of large com­pa­nies clos­ing stores.

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