Some major retailers are struggling big time. Not only are they still recovering from the economic crisis, but they are facing tough competition from e-commerce as more and more shoppers go online. Even though total U.S. retail sales grew 3.7 percent in the fourth quarter of 2014 compared to the same quarter in 2013, e-commerce sales grew a whopping 14.6 percent in the fourth quarter.
According to the Department of Commerce, there was a decrease in department store sales from an average of $14.3 billion a month in 2013 to $14 billion per month in 2014, which amounted to a decline of 2.1 percent. But sales by non-store retailers, such as via mail order and e-commerce, saw an increase from a monthly average of $37.3 billion in 2013 to $39.9 billion in 2014, a boost of 6.9 percent for the same period.
All this adds up to store closures at various major retailers.
But some of the names of retailers closing the most stores may come as a shock to many. Macy’s, for example, according to a 24/7 Wall St. analysis is one of the three major department stores decreasing their outlets. They announced earlier this year it would close 14 stores as part of a restructuring plan to increase online sales. The closures involve fewer than two percent of the chain’s 830 stores, but more than 1,300 people will lose their jobs when this happens in spring. Macy’s will, however, open three other locations.
And Family Dollar Stores, which was acquired by Dollar Tree, is closing as many as 500 Family Dollar outlets. Dollar Tree is the No. 1 dollar store chain in North America. When all is done, Dollar Tree will have more than 13,000 stores with almost $19 billion in sales and more than $2 billion in earnings.
Another of the top 10 retailers closing the most stores is Staples. The retail chain said it would close 225 underperforming stores in North America by mid-2015. Staples can’t compete with larger retailers such as Wal-Mart and Amazon.com, both of whom offer office supplies. Even more stores will close if the merger of Staples and Office Depot goes through.
“One retail analyst estimates a merger would result in more than 1,000 store closings, especially since most Office Depot stores are located just down the street from a Staples,” reports The Huffington Post.
While Staples recognized the trend to online shopping and tried to develop its online sales, the company actually saw a drop of 5.9 percent in its fiscal 2014.
Also on the list of top closings are: JC Penney, Abercrombie & Fitch, Radio Shack, Aeropostale, Barnes & Noble, Office Depot, and Sears.
Obviously, the retail industry is changing — even faster than some predicted.