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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: 94021

Reported Deaths: 2846
CountyConfirmedDeaths
Hinds6979155
DeSoto542555
Harrison374372
Jackson339967
Madison321286
Rankin319375
Lee261067
Jones242778
Forrest239570
Washington218171
Lafayette209239
Lauderdale2007124
Bolivar179565
Oktibbeha175450
Lamar163534
Neshoba1540103
Panola144527
Sunflower142144
Lowndes140357
Warren138150
Leflore137080
Pontotoc123616
Pike121348
Monroe118965
Scott116425
Copiah116333
Coahoma112827
Holmes109258
Marshall107615
Lincoln106853
Grenada106235
Yazoo103929
Simpson101443
Union97824
Tate95537
Leake94037
Adams92136
Wayne87721
Pearl River86750
Marion84133
Prentiss81517
Covington80922
Alcorn77511
Itawamba77021
Newton75923
Tallahatchie75718
George75113
Winston72519
Tishomingo66137
Chickasaw65624
Tippah64516
Attala64125
Walthall59425
Clay58117
Hancock56421
Jasper55515
Noxubee54315
Clarke53739
Smith52414
Calhoun50612
Tunica48113
Montgomery45520
Claiborne45216
Lawrence42512
Yalobusha41814
Perry40918
Quitman3755
Humphreys37315
Stone35711
Greene34617
Webster33113
Jefferson Davis32811
Carroll31212
Amite31110
Wilkinson30217
Kemper28615
Sharkey26312
Jefferson2439
Benton2201
Franklin1893
Choctaw1795
Issaquena1033
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 131988

Reported Deaths: 2304
CountyConfirmedDeaths
Jefferson19123337
Mobile13122290
Montgomery8688173
Madison763075
Tuscaloosa7323114
Lee575159
Shelby571950
Baldwin508749
Marshall387943
Calhoun337439
Etowah336547
Morgan321426
Houston272722
Elmore255847
DeKalb237119
St. Clair224335
Walker224380
Talladega207726
Limestone200119
Cullman186218
Dallas174926
Franklin174528
Russell17312
Autauga169124
Lauderdale165333
Colbert160926
Escambia156425
Blount156014
Jackson151611
Chilton150227
Dale133343
Covington131127
Coffee12838
Pike11619
Tallapoosa113683
Chambers113242
Clarke105517
Marion94828
Butler91138
Barbour8387
Winston71612
Marengo70119
Lowndes64927
Pickens63814
Bibb63610
Randolph62212
Hale61528
Lawrence59220
Bullock59114
Geneva5814
Monroe5768
Cherokee56916
Clay5527
Washington54913
Perry5386
Wilcox53111
Conecuh52411
Crenshaw52331
Macon47820
Henry4754
Fayette4269
Sumter41819
Lamar3532
Choctaw34512
Cleburne3326
Greene30015
Coosa1653
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