First Time in 4 Years: More Store Openings Than Closures!
November 29, 2021
More brick-and-mortar retail is needed. Store openings are outnumbering closings for the first time in four years, according to an analysis of more than 900 chains by the IHL Group, a research firm.
The largest amount of growth is coming from mass merchants, food, drugs and pharmacy, and convenience chains, The Wall Street Journal reports.
E-commerce is also driving a lot of the increase in the physical footprints of stores as a greater number of online and store experiences become more closely linked. Digital businesses are relying on physical stores for easier shipping or for customer pickup or returns.
E-commerce had been blamed for physical stores closing. The nation’s largest chains closed 6,573 more stores than they opened last year.
Property owners have been offering incentives to win more tenants back. Companies took notice. For example, company officials with the clothing company Levi Strauss & Co. told The Wall Street Journal that their company is securing space for prices 15% less than pre-pandemic levels. They plan to open 100 U.S. stores over the next five years.
“The majority of consumers like to engage with us in our stores,” Harmit Singh, Levi’s finance chief, told The Wall Street Journal.
Dick’s Sporting Goods is opening more than 800 stores under its House of Sport, Public Lands, and Golf Galaxy brands that include more experience activities within them, such as batting cages, rock climbing walls, and putting greens.
Also, digital-first companies want more of a physical footprint. Amazon is planning to open its own department stores.
Overall, retailers are opening 4,361 more brick-and-mortar stores in 2021 than they closed.
“It’s not like it’s stores against e-commerce anymore” Brendan Witcher, a Forrester Research principal analyst, told The Wall Street Journal. “They play an integral role in supporting each other. The old story that stores are dead is simply not true.”
Source: “More Stores Are Opening Than Closing for the First Time Since 2017,” The Daily Upside (Nov. 28, 2021) and “E-Commerce Needs Real Store Locations Now More Than Ever,” The Wall Street Journal (Nov. 25, 2021) [Log-in required.]