The Retail Apocalypse: Which Store Categories Have Been Hit the Hardest?

April 13, 2018

This article is included in these additional categories:

Industries | Retail & E-Commerce

E-commerce – which was a $437 billion retail market in 2017 – has certainly upended the US retail landscape. But not all retail segments are surrendering to the so-called “retail apocalypse.” In fact, some are thriving, as seen in a recent report [download page] from Nielsen.

The report looked at changes in the number of total open store counts between 2007 and 2017 across various categories.

The analysis shows that Consumer Electronics stores – Radio Shack is a key example – have been the hardest hit, with a net decline of 6,425 stores over the course of the decade-long period.

Apparel stores – as evidenced by recent store closures by Abercrombie & Fitch and American Apparel – have likewise seen a tremendous amount of overhaul. Indeed, Nielsen counts a net decline of 4,125 Apparel stores between 2007 and 2017.

While other store types have also seen closures, they haven’t been hit quite as hard: Book stores are the only other to have contracted by more than a thousand (1,066). One notable category is the Toy store: while it had the smallest amount of contractions of those with net declines (-457), the recent news that Toys R Us will be closing all 735 locations in the US will certainly add to that count.

On the other end of the spectrum, Dollar stores have thrived. Indeed, the number of Dollar stores in the US increased by 11,249 between 2007 and 2017, more than the number of Consumer Electronics and Apparel store closures, combined.

Two other store types stand out as also performing well in this new environment: Convenience & Gas stores (+8,650) and Drug stores (+5,632), despite the former seeing a contraction of 355 stores last year.

Number of FMCG Stores Declines For First Time Since 2009

Looking specifically at FMCG, Nielsen reports that the number of open stores declined by 0.3% in 2017, the first decline since 2009 (-0.1%). While that’s a rather small relative decline, it still equates to more than 1,000 fewer stores in 2017 than in 2016.

Topline performance stats indicate that unit sales in FMCG brick and mortar stores dropped by 1.2%, but that dollar spending was mostly flat, increasing by 0.2% (to $912.2 billion). Still, Nielsen notes that “true growth, inflation aside, continues to escape the brick-and-mortar FMCG landscape.”

Dollar growth was highest for Fresh Perishables (+1.2%) and Home & Personal Care (+0.3%), while Non Grocery such as Tobacco and Pet Care inched down by 0.1%, as did Center Store Edibles.

The full Nielsen report is available for download here.

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