Barack Obama recently stated that anyone who is claiming that America’s economy is in decline is “peddling fiction”. Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country? Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse. Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States. Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.
Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news. In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending…
In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”
“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.
And it is very true – Sears is doing horribly, but they are far from alone. The following are 13 major retailers that are closing down stores…
#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.
#2 It is being reported that Sports Authority will file for bankruptcy in March. Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.
#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.
#4 Target has just finished closing 13 stores in the United States.
#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.
#6 Office Depot plans to close a total of 400 stores by the end of 2016.
The next seven examples come from one of my previous articles…
#7 Wal-Mart is closing 269 stores, including 154 inside the United States.
#8 K-Mart is closing down more than two dozen stores over the next several months.
#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.
#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.
#11 The Gap is in the process of closing 175 stores in North America.
#12 Aeropostale is in the process of closing 84 stores all across America.
#13 Finish Line has announced that 150 stores will be shutting down over the next few years.
These store closings can be particularly cruel for small towns. Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina…
The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.
Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.
Of course there are many factors involved in this ongoing retail apocalypse. Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.
But in the end, the truth is that you can’t get blood out of a rock. The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.
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And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores. The following comes from CNBC…
Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.
“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”
In order to have a thriving middle class, we need good paying middle class jobs. Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly. For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.
During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs. At this point, 51 percent of all American workers make less than $30,000 a year.
And there is no way that you can support a middle class family with children on $30,000 a year.
We have an economy that is in the process of failing. We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.
During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling. Despite all of those desperate measures, our economy continues to crumble.
We stole from the future to try to paper over our failures and it didn’t work. Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.
I wish I had better news to report, but I don’t. Get prepared now, because very rough times are ahead.
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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.
It’s not just the big companies. My wife was just laidoff because the owner is closing one of his two locations. Where I work hours are being cut due to slow business. Once again Obama is clueless.
Even an idiot gets lucky with a success or two once in a while.
To be this consistently wrong, you really have to know what you are doing.
America’s “economic recovery” only applies to people of consequence, not us peons who shop at Target or Sears- if we can afford to shop at all.
They, after all, are the ones that matter to those with a voice in the mainstream media.
…or maybe people just woke up and stopped being mindless consumers who buy stuff they don’t need. Shopping patterns have definitely changed. Wandering around a mall just to shop stopped being fun when the prices of everything went through the roof. The inflation the government insists doesn’t exist is totally out of control. I’m glad all these awful big box stores are closing, only it’s too bad the huge buildings will sit empty and morph into moldy eyesores. They should all be torn down and turned into orchards, gardens and parks.
Agreed (except for the waking up part), bricks and mortar will be supplanted by parcel delivery trucks and Amazon drones.
If people don’t use them for skeet shooting that is.
obama said we must fundamentally change America, he never said for the better.
What were the fundamentals of America for say for the previous 200 years?
United, economically sound, prosperous, honorable, trustworthy, moral, ethical, revered the list goes on and on. The last five on the list do not pertain to politicians.
obama has made us the laughing stock of the planet………….
Stores are experiencing an economic downturn because thy are selling crap. Have you gone into these stores lately? The quality of the merchandise is appalling. Clothing for example-womens/ladies/girls: Why would anyone pay 30-50 dollars for a blouse or shirt that you can see through because it is so thin? Even if you live in a warm climate you still need to wear another top underneath and if you live in a cold climate, sweater. Who want to buy a beautiful print blouse to cover up? If you look at the seams they are sewed so close to the edge of the fabric that it will tear or come loose easily. All clothing geared towards females are made like this. It’s a little better with men and boys but I believe female clothing is a larger part of the market.
Electronics, what a joke. Half the things you buy don’t work so you return them often, some break down in the first 3 months and the casing are very poor quality. GM foods on grocery shelves-need more be said. Stores like Aldi’s and Traders Joes are getting Whole Foods customers.
I don’t think it’s online buying that cutting into their profits, it’s the fact that they have been passing off poor quality merchandise, charging top dollars for them and treating customers as if they are the enemy. Many consumers have become smarter. They know if they buy a clothing item at Target, wash it 3 times the color began to fade, wash it 3 more time and the item has lost it’s shape-they will most likely not purchase from that store for a long time if ever. Best Buy treats their customers like crap and after you make a purchase and there is a problem, to get it resolved they create an adversarial situation. I have written the CEO of Best Buy several times in the last decade complaining about policies the stores were not following. It does get results.
These corporation that need a solid customer base to survive refuse to see the forest for the trees.
One solution about clothes… buy from Thrift Shops. You can get top name brands for a few bucks, nicely broken in so you can see how well it washes and wears. This is especially true In really cold climates where clothing is more about survival than fashion. Plus it’s really fun when you find something you love wearing for $2.
Online commerce has nearly tripled in the past 10 years, from less than 2.% to over 7.5%, according to census. com. According to the same report, in 2015, overall retail sales increased by 31 billion, while online sales increased
by 12 billion. Unless these numbers are cooked, retail sales continue to grow, with an ever increasing amount online. Why are stores closing? Bad business models. New stores continue to open. JC Pennies, Sprouts, and others show increased sales.
Bottom line: while stores are closing, retail sales continue to grow, with online increasing rapidly.
Most of these WalMarts were given tax abatements when they were built. To make up for the lost revenue, municipalities raised sales tax rates and property taxes. With the closing of these stores, the tax rates won’t decrease, in fact, they will have to increase because there will no longer be any taxes collected since the sales won’t be there. Just another picture of a destroyed America in the wake of the Reagan Revolution.
Chosen Hands, hidden plans: “The Bolshevik Revolution”, you’d be over the target.
And it be Protocol, as always.
Monopoly capitalism does wonders to create a mess.
The collapse of the federal reserve bank, and wall street are apparently inevitable.
These businesses are closing down because they are not making a “profit” oh! instead of making a lot of profit perhaps they need to return to the values that built them.
Huge government seems to be conveniently destroying everything. Could that be some part of the problem?
The consciousness is changing: some will- some won’t- realize how this is happening.
Things are a mess and to clean up the mess will be messy.
Creeping socialism has done its little trick… what is next? What is next?
Wake up & smell the total & intentional evisceration of the post WWII economy of Mom & Pop USA…brought to you by the zionist/ jesuits or ‘Jewsuits’ on Wall Street in conjunction with the ruling class families of the 0.001%…that essentially own everything anyway…but they want it All!…I guess people are so dummed-down by fluoride & alpha-wave hypnotic Tell-lie-vision & contrived religions …to notice that ‘All’ your jobs were being outsourced to China right at the ‘get-go’…You’ve been lied to by sociopathic politicians & what you think is education… is really abject programmed BS brainwashing mind pablum…hence the USA USA USA to maintain this sordid illusion…Take Back Your Country!
An interesting post.
Each phrase has meaning, and I agree with you on every one.
There is a proliferation of DEGENERACY, DRUGS, TERRORISTS, and LOSERS seeking to live off the teet of the gov. NOT GOOD!!
Why pay $400 per oz. of caviar? Can go fish out female sun perch and wind up with several ounces of caviar. Fish eggs are fish eggs.
A lot of big box stores are selling crap. Durable goods are not. Example, if you follow one store’s train of thought on 19″ push mowers, you buy one every year. They once lasted years.
On-line or off-line people do not want to buy crap. People also have cognitive dissonance over costs. Oil prices are in the basement, why then are costs so high? Production, distribution & transportations costs should go down as fuel costs do. Instead prices keep rising.
The stores are still selling crap, same crap as yesterday, but the prices triple? Yeah sure, we’ll take 3 dozen craps, not.
“God and Nature do nothing in vain.”
First: concerning the nature and properties of MERCURY.
Second: concerning the nature and properties of JUPITER.
Third: concerning MARS and his properties.
Fourth: concerning VENUS and her properties.
Fifth: concerning the nature and properties of SATURN.
Sixth: concerning LUNA and the properties thereof.
Seventh: concerning the nature of SOL and its properties.
“By the element of fire all that is imperfect is destroyed and taken away, as, for instance, the five metals, Mercury, Jupiter, Mars, Venus, and Saturn. On the other hand, the perfect metals, Sol and Luna, are not consumed in that same fire. They remain in the fire and at the same time, out of the other imperfect ones which are destroyed, they assume their own body and become visible to the eyes.”
The sooner the greedy ceo’s fold up shop the sooner Mom and Pop shops can make a come back.
Lee Iacoa was the only ceo that actually gave up his salary to save his company.
Other than him, they all make too much and are all a part of the gold collar scum crowd. Don’t kid your selves it’s not hard work for them it’s a matter of learning to play a respectable round of golf.
Lets look at a few of these companies.
Sears/Kmart both of these have been in financial trouble for years, and Sears has not helped itself by allowing incompetent contractors to represent their name in their home improvement business.
Target closed stores that were not “super center” models, this along with managements implementing leftist/ liberal policies, i.e. no firearms allowed ( even in states where CCW and open carry are allowed) and no departments with “gender based” labels, have driven customers away in droves.
The various mall based clothing stores exist in very competitive and high overhead environments where most offer nothing different from their competitors.
These factors along with the “recessions over” lie will continue to hurt retail at least until a new administration is in place or their management teams take action to focus on what their companies were intended to do and stop making political statements.
Yes, the economy is in the crapper, and this is just the beginning- BUT a the problems many of these big retailers are having are purely due to their own poor business practices. e.g. Sears- Their website is terrible, and their prices are absurd.(I bouight a KJV 1611 replica Bible online for $89- Sears wanted $500 for the same thing!!! The very same thing- same ISBN and all…) Macy’s? LOL- again, their prices are redonkulous, and they are virtually all located in malls or other places where the cost of doing business is very high. Many store chains just plain were too optimistic and opened far too many stores to begin with. Staples? They had a store in the nearby town where I do my shopping- a town of only 12K people, in a very rural area. What genius decided that it would be a good idea to open an office supply in a town where a third of the people are on the dole, and the other 2/3’s count on their fingers and toes?!(The store is already gone).
And Walmart? They have huge supercenters, but what’s the point? The shelves are always half empty, and they never have what you want- so where’s the convenience if you have to gto to four other stores anyway? Might as well just shop at the other stores, even if it costs two-cents more, you save on gas and time.
And what ever happened to ambience? I used to enjoy shopping at B&M stores and being able to handle and examine things before buying them, but increasingly, instead of a pleasant atmosphere with elevator music softly playing, you instead feel like cattle going through a stockyard auction, with screaming kids and 400 lb. women wearing thongs and flip-flops with rolls of fat hanging out, as loud annoying music blares over the PA system to distract you and make you want to just grab what you need and rush right out- not to mention long check-out lines. So I now buy as much as I can online.
It’s easy to blame the economy….but the fact is, we are seeing the results of the new generation of management who have been educated by theoreticians who never earned a dollar in their lives, except within the confines of academia- and what you are seeing is the result of idiotic philosophies being implemented.
Are the stores reacting to the economy, or rather contributing to it’s decline?
Modern day Dark Ages. No grocery store, no pharmacy… Oops.
Rome didn’t fall, it crumbled. So, too, the US.
So true! While the local economy is still quite good in the very rural area where I have lived for the past 15 years now (Because it is based on agriculture- i.e. it actually still produces something of value) the fact is, that back in the 1970’s in the town of 1500 people which is our county seat, they had all kinds of stores- you buy virtually whatever you needed right in town. Today, there is little left- and just in the time I’ve been here, I’ve seen a lot of businesses close…and the handwriting is on the wall for many others- largely because people travel so much today- virtually everyone or at least their spouse goes to the bigger town in the next county for work or entertainment or specialist doctors, etc. so they end up doing their business there where they can save a few cents- it’s a vicious cycle…and then the younger ones end up moving to that town because “there’s nothing” left in the little town. (There are positives to this too, though- as personally, I was looking for an area where the population would remain the same or decline, rather than increase- keeps taxes low and government small; and gives those of us who prefer a quiet out-of-the-way place what we wan! At least I don’t have to worry about them building a housing development on the acreage next to my own, as I learned from a neighbor who has lived here all his life, was indeed almost a reality back when real estate was booming). I’ll gladly accept a little inconvenience (I only go to town a few times a month anyway) to keep thi place from turning into another sprawling suburb. …
There are a lot of reasons that have nothing to do with the economy in general that this is happening, not the least of which is that less people are shopping in brick and mortar stores so it makes no sense to keep open and pay for the land and expenses of a store no one is going to because they already did their shopping online. In addition, a lot of these companies expanded too much too fast during the glory years and cannot sustain it, which is fairly common. Another is that they expanded so much that supply has been outweighing demand for some time. Articles like this are poor and lazy journalism. Your desperation to blame Obama like the mindless gop parrots you are is a bit obvious when you do no research at all from any unbiased sources.