The truth about the retail apocalypse

There were a record number of store closings in 2017. But in that same year low-price and premium retailers saw strong sales. So is the hype about the retail apocalypse overblown? CNNMoney's Paul R. La Monica explains why the industry isn't struggling as much as you think.

Posted: Jul 4, 2018 12:11 PM
Updated: Jul 4, 2018 12:27 PM

America's malls haven't been this empty in nearly six years.

The vacancy rate at metro and regional malls around the United States hit 8.6% last quarter, the highest since the end of 2012, according to data released Monday by real estate research firm Reis.

Back then, the economy was still working its way out of a recession and an excess of malls had been built in the preceding decades. Retail vacancies peaked at 9.4% during the middle of 2011.

"We were over-retailed," said Barbara Denham, a senior economist at Reis. "The recession knocked a lot of stores out of business," she said.

Circuit City, the big box electronics store that filed for bankruptcy in 2008, "was a big driver of the vacancies," she said.

Related: Retail defaults soar to record high in 2018

Today, the growth of online shopping is one of several factors taking a toll on brick-and-mortar retail stores.

Although online sales still make up less than a tenth of total retail sales, they're growing at around a 15% clip per quarter— much faster than purchases at brick-and-mortar stores.

The shift online contributed to the worst quarter in nine years for neighborhood and community shopping centers.

The vacancy rate last quarter, 10.2%, was higher than at malls in part because of hundreds of Toys "R" Us store closures.

Related: 700 empty Toys 'R' Us stores. Who's going to fill them?

Vacancies at local shopping centers increased in more than 70% of metro areas. Indianapolis, Dayton, and Wichita had the highest rates in the country.

Other retail chains are shutting their doors at a rapid pace, further hurting malls and shopping centers. The number of major store closings in 2017 more than tripled to a record 7,000.

Related: Retail's toughest year: A record for store closings

This year is on track to top last year's mark. More than 4,100 major retail stores closed so far in 2018, according to Coresight Research, a retail think tank.

Six hundred Walgreens have closed this year, while Bon-Ton, Sears and Kmart, Best Buy, Signet Jewelers, Mattress Firm, and GNC have all closed 200 stores or more this year. Claire's, Foot Locker, and The Children's Place have closed 100 or more locations.

—CNNMoney's Chris Isidore contributed to this story.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 13260

Reported Deaths: 625
CountyConfirmedDeaths
Hinds89324
Lauderdale67855
Madison65421
Scott58910
Neshoba51231
Forrest48034
Jones46713
DeSoto4616
Leake38410
Holmes36523
Rankin3496
Jackson29613
Copiah2784
Attala27014
Lincoln24320
Monroe24224
Leflore24025
Harrison2346
Newton2243
Lamar2194
Yazoo2152
Pearl River20327
Pike19611
Adams18615
Lowndes1607
Noxubee1586
Washington1535
Warren1506
Bolivar14010
Jasper1393
Oktibbeha13410
Smith13110
Covington1271
Chickasaw12612
Clarke12616
Kemper12510
Lafayette1233
Carroll11310
Wayne1090
Marion1088
Lee1045
Clay993
Winston981
Coahoma983
Lawrence901
Hancock8711
Simpson850
Itawamba857
Yalobusha824
Wilkinson829
Montgomery781
Sunflower773
Grenada752
Jefferson Davis712
Union715
Tippah7011
Marshall693
Panola622
Calhoun604
Tate591
Claiborne581
Humphreys537
Amite521
Walthall510
Tunica483
Perry462
Jefferson400
Prentiss383
Stone300
Choctaw292
Webster271
Pontotoc263
Franklin252
Tishomingo250
Quitman240
Tallahatchie241
George191
Alcorn151
Benton140
Greene71
Sharkey70
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 14478

Reported Deaths: 551
CountyConfirmedDeaths
Mobile1996109
Jefferson161488
Montgomery118630
Marshall6499
Tuscaloosa50512
Lee49832
Franklin4476
Shelby43319
Tallapoosa39662
Butler34411
Chambers33623
Madison2964
Baldwin2749
Elmore2637
Etowah23610
DeKalb2213
Coffee2001
Walker1981
Dallas1973
Sumter1916
Lowndes18610
Houston1644
Morgan1621
Autauga1593
Calhoun1413
Choctaw1414
Pike1360
Colbert1362
Marengo1336
Hale1293
Russell1280
Lauderdale1282
Randolph1257
Wilcox1187
Marion11310
Bullock1111
Barbour1101
Clarke1022
St. Clair1021
Pickens934
Talladega912
Greene894
Chilton871
Dale830
Cullman760
Limestone740
Jackson692
Covington651
Washington645
Winston620
Macon602
Bibb591
Crenshaw582
Henry562
Blount491
Escambia433
Lawrence420
Coosa331
Geneva330
Cherokee332
Perry310
Monroe282
Clay272
Conecuh251
Lamar200
Cleburne131
Fayette110
Unassigned00
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