Sunday, February 17, 2013

Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

Michael Snyder
Activist Post

If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores? When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses. But now it is being projected that all of them will close hundreds of stores before the end of 2013. Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a "total disaster". So why is this happening? Why are major retail chains all over America collapsing? Is the "retail apocalypse" upon us?

Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes. Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006. The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt. The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore. So retail chains all over the United States are now closing up unprofitable stores. This is especially true in low-income areas.

When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.

Just check out some of these store closing numbers for 2013. These numbers are from a recent Yahoo Finance article...
Best Buy
Forecast store closings: 200 to 250 
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125 
J.C. Penney
Forecast store closings: 300 to 350 
Office Depot
Forecast store closings: 125 to 150 
Barnes & Noble
Forecast store closings: 190 to 240, per company comments 
Forecast store closings: 500 to 600 
Forecast store closings: 150 to 175 
Forecast store closings: 450 to 550
The RadioShack in a nearby town just closed up where I live. This is all happening so fast that it is hard to believe.

But the truth is that those store closings are not the entire story. When you dig deeper you find a lot more retailers that are in trouble.

For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.

Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.

Even Wal-Mart is going through a tough stretch right now. According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February...
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. 
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my (more than) 7 years with the company.”
So what in the world is going on here?

The mainstream media continues to proclaim that we are experiencing a robust "economic recovery", but at the same time there are a whole host of indications that things are continually getting worse.

Even global cell phone sales actually declined slightly in 2012. That was the first time that has happened since the last recession.

Perhaps it is time that we faced the truth. The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.

Mort Zuckerman pointed this out in a recent article in the Wall Street Journal...
The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.
So how can the mainstream media be talking about how "good" things are if we still have 6.4 million fewer jobs than we had back in November 2007?

And sadly, things may soon be getting a lot worse. If Congress does not do anything about the "sequester", millions of federal workers may shortly be facing some very painful furloughs according to CNN...
Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst. 
Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation's 2.1 million federal workforce, experts say.
If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.

I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.

For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.

Business Insider recently profiled the Wind River Indian reservation in western Wyoming. The following is a brief excerpt from that outstanding article...
The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself. 
Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes. 
Even among reservations, it's renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.
You can see some amazing photos of the Wind River Indian reservation right here.

It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.

We are a nation that is in an advanced state of decline. But as long as the financial markets are okay, our leaders don't seem too concerned about the suffering that everyone else is going through.

In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC. The following is how a Zero Hedge article summarized that interview...
Starting at around 1:50, Greenspan states the odds of sequester occurring are very high - in fact, the playdough-faced ex-Chair-head notes, "I find it very difficult to find a scenario in which [the sequester] doesn't happen" But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken - "the issue is how does it affect the stock market." 
While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox'd and babbling Bartiromo when he admits "the stock market is the key player in the game of economic growth." 
Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, "if the stock market can hold up through this, then the effect will be rather minor."
Do you see?

As long as the stock market is moving higher they think that everything is just fine and dandy.

And the Obama administration?

They continue to pursue the same policies that got us into this mess.

Their idea of "economic reform" is to threaten to sue businesses that do not hire ex-convicts.

And of course now that Obama has been re-elected he is putting a tremendous amount of effort into "stimulating the economy".

For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.

Meanwhile, the U.S. economy is getting worse with each passing day.

If you doubt that economic conditions are getting worse, please read this article: "Show This To Anyone That Believes That 'Things Are Getting Better' In America".

When you look at the cold, hard numbers, it is undeniable what is happening to America.

And our leaders are not doing anything to fix our problems. In fact, most of the time they are just making things worse.

So buckle up and get prepared. We are in for very bumpy ride, and this is only just the beginning.
This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.


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dogismyth said...

thanks activist post for wiping out my entire comment. I'm sure you couldn't avoid it (wink wink).

abinico said...

Predatory capitalism.

abinico said...

"Your comment will be visible after approval." Yeah, I bet it will. You obviously censor ideas that are dangerous - who is your masta - the CIA? There is software available to stop bad words even whole sentences, why is that not good enough for you?

abinico said...

Got it again: Your comment will be visible after approval.

Anonymous said...

That kind of thing happens and one soon learns to compose ones' comments in a word processor such as MS Word first and then copy and paste them into the comment box so as to still have a copy if something happens.

Anonymous said...

Simple it is Obamanomics

Anonymous said...

So why are the major chain stores failing?
'Cause 'made guys' like me are shopping at the Salvavtion Army!
(I Have approx. 2,300 USD in disposable income.... bite me all you mouth breathing salves of Sam Walton!!!!!!!!!!!

Anonymous said...

Well, there's a perfect example of what the Right Wing's ardent desire to do away with the minimum wage would do. The silver lining (if there is one) is that maybe, this will be the thing that halts to hideous and destructive super stores making it possible for the mom & pops stores that really made this country what it was to come back. One can only hope. One thing is for sure, consumerism is a thing of the past.

Anonymous said...

Sooooo, it appears that the masters do need our green paper after all. Who woulda thunk it?

Anonymous said...

"For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty."

Yeah, because before, the Indian reservations were filled with palaces and luxuries. What a hypocritical and clueless comment. That's like saying that the ghettos have been neglected by the federal government and have become hotbeds for crime, drugs & poverty.

Anonymous said...

You had my attention until you started the Obama bashing. Of all the things you could have said about the guy, you just had to pick on the weakest bullshit possible. How about pointing out to the raging wars? Or the free passes for the rich? Or the continued hand outs to Wall Street? For example, how about citing that FaceBook paid ZERO taxes notwithstanding the fact that they made billions in one quarter alone. Shame, shame, shame!

Anonymous said...

This is by design. Retailers intentionally overbuilt in order to try and kill each other off. Those who survive take the market share.

ShootyMcBang said...

They are failing because their profits are borne of the fruits of slave labor. It is inevitable that they should fail. Simply because it is wrong. I thought that lesson had been learned.

Anonymous said...

I disagree with the premise of this article because where I live, business is expanding and growing. Best Buy and Barnes and Noble have always been worthless businesses: better deals on electronics and books can be found on the internet. Sears has a terrible return policy, why shop there when one can shop at Wal Mart, or ,again, the internet? In our area, within a 10 mile radius, there are 3 Gamestops and 4 WalMarts - we don't need all these stores! They overexpanded and overbuilt. Rather than bring in a new business idea to the area, like a Soup Plantation restaurant, just more terrible Applebees pop up. The closure of needless stores is a good sign. I hope people are buying less, filling landfills, polluting, and littering less.

Anonymous said...

Then after it all crashes down then what happens next?

Anonymous said...

“Predatory capitalism is characterized as the following: Profit-seeking corporations can be a great force for good in the world, creating and providing wonderful goods and services that would be unavailable by any other means. But we also recognize that if they are unregulated, they harm the public these five ways.”
• 1) NOT PAY TAXES -In order to maximize profits, they always seek to avoid or minimize their taxes.
• 2) ELIMINATE COMPETION -In order to maximize profits, they always seek to eliminate or control their competition.
• 3) CUT WAGES AND SALARIES - In order to maximize profits, they always seek to reduce their labor costs.
• 4) DISREGARD THE ENVIRONMENT - In order to maximize profits, they always seek to avoid all environmental restraints.
• 5) SELL DANGEROUS, HARMFUL PRODUCTS - In order to maximize profits, they may tempt to sell dangerous or harmful products.

Katherine Williams said...

Revelation 18:1 And after these things I saw another angel come down from heaven, having great power; and the earth was lightened with his glory.2 And he cried mightily with a strong voice, saying, Babylon the great is fallen, is fallen, and is become the habitation of devils, and the hold of every foul spirit, and a cage of every unclean and hateful bird.3 For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies.4 And I heard another voice from heaven, saying, Come out of her, my people, that you be not partakers of her sins, and that you receive not of her plagues.5 For her sins have reached unto heaven, and God hath remembered her iniquities.6 Reward her even as she rewarded you, and double unto her double according to her works: in the cup which she hath filled fill to her double.7 How much she hath glorified herself, and lived deliciously, so much tor...

Co-opted Confederate said...

It could be because Conservative, bonefide, legitimate, ID card Carrying non entitlement recieving American citizens who have government issued ID Cards, and are not affraide to ahow them are boycotting importers of chinese made and other foreign made junk, And other Products, Idologies, Dogma and doctrine Not made in the USA by Americans. Maybe Gun owners are boycotting Businesses, Importers, manufacturers, retailers, whole salers that support Progressive Socialist New World Order Obamafraud style democracy infavor of Businesses that support the right to keep and bear arms and other Constitutional goodies, Could it also be that U.S. Taxpayers are sick and tired of the US government subsidising the entire planet in order to curry favor with the Overlord of the New World Oder Satan himself.

Hide Behind said...

You camnot say that mom and pop retail paid their workers any better than the box stores or the boogy man Wal Mart in fact they exploited their workers far more that todays mega stores.
Many reasons the chain stores cutting back.
How many dollars now get pumped into gas tanks today compared to 5-10 years ago?
HOw much higher is your electricity or your. W/S/Garbage bills.
How many people put tax defered college funds?
How many more dollars come out of paychecs for health insurance?

Anonymous said...

just a note to those saying their comments are pending approval and are claiming censorship.

Those who read your complaints... have no way to know if you really did send a previous comment or simply if your just a govt. paid troll to make Activist post like a bunch of anon ops organisation.

anything that you do on the internet is archived, so be safe OR be free and speak your mind.

Sharon Mallia said...

Oh ye of little minds! I remember how you all used to blame Clinton for everything. Now you blame Obama.
I don't shop at WalMart anymore because of their unfair employee policies. I haven't shopped at Blockbuster for ages because they were rude and unreasonable to their customers. I don't shop at Hobby Lobby anymore because JoAnn Fabrics has opened a store nearby that has better prices and is open on Sunday and doesn't spout unconstitutional warnings about searches. Like most thinking folk, I choose where I can get the best product, the least toxic product, at the best price from a store that gives a damn about its employees. Many of these stores are overbuilt dinosaurs run by owners that care primarily about wringing every last dollar of profit out of their customers. Periodically, stores go under and are replaced by others that are more timely.
How many of you still have a land line? How many of you still buy expensive cable TV when you can get the same programs on the internet for free or cheap? How many of you have reduced your use of electricity or fuel because it is good for the environment? How many of you have chosen not to eat at Whataburger because of its political stance? How many off you have chosen to eat at Whataburger instead of some other fast food place because of its political stance?

My point is, the sky is not falling. Change happens, it is no one's fault, it is just the natural order of business. Anyone use a typewriter out there, or a tape recorder, or play vinyl records??

Anonymous said...

I just hope all the big boxes collapse while we still have a few old general stores left.

Anonymous said...

Less people are buying new merchandise. More people are buying used items from the thrift stores. Every time I drive buy the second hand stores the parking lots are full of cars. The consumer is looking for bargains and things that are on sale.

The beef prices in the grocery store are out of reach for the average working stiff. Most people only buy beef if is on sale or out dated in the mark down bin.

I asked one of the stockers in the store the following question: What happens when people can no longer aford meat? Does it sit there and rot? Their answer: I don't know, da.

I guess people are going to have to eat beans and rice.

Anonymous said...

The Retail sector is failing because they killed the middle class off by outsourcing and destroying "contract Law"-It is really good to see Wall Street commit suicide-It is more than fitting-The lying is even funnier!

Tony said...

What did everyone think was going to happen? Obama's plan is working perfectly.

Anonymous said...

These businesses failed and will keep failing because they can't keep up with the market. The concept of a video store is massively outdated, why go to a store when you can order online or get a movie from a box for a fraction of the cost? As for Radio Shack, who shops there? No one! They offer nothing that anyone wants, outdated technology at over the top prices.

Anonymous said...

And whoever said that these companies over saturate the market was right on, I call it the 7-11 effect, they opened stores on every corner, add that to the fact they let their stores go to crap and a cleaner nicer store like Wawa came in and you can see why they failed.

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