By John Tiffany —
While the White House continues to issue rosy remarks about the “recovering” state of the United States economy, a “retailmageddon” is hitting America hard.
Major retail chains that have been American institutions for decades are shuttering thousands of stores, and it is only just beginning.
Says Michael Snyder of the website “The Economic Collapse,” Internet shopping, while a factor, accounts for only some 20% of the change.
Perhaps you have noticed big stores going out of business in your neighborhood. With megacorporations shipping off manufacturing jobs to places like China, retail jobs are a primary part of America’s employment picture.
Even Walmart is feeling the pain—looking at closing about 100 under-performing superstores. Office supplier Staples is reportedly closing 225 stores. Remember Blockbuster video stores? A few years ago they were all the rage; now Blockbuster has shut down all of its shops. The Children’s Place is closing down 125 of its weakest stores by 2016. Macy’s is closing down five stores, eliminating 2,500 jobs.
Aeropostale, a shopping mall-based retailer of casual clothing, is projected to be closing some 175 shops during the next two years.
Target has 700 “empty” positions it will not be filling and will be dropping another 475 jobs.
Sears Roebuck & Company is still around but sales have been declining for 27 quarters in a row, and Sears has closed some 300 stores since 2010. CNN has reported Sears, which also owns Kmart, will likely shut another 500 Sears and Kmart stores in the very near future.
J.C. Penney Corporation, Inc., dying for years, lost $586 million in the second quarter of 2013. It has announced plans to close 33 more stores.
About 1 billion square feet of retail space is now vacant in America, but eateries are also affected. McDonald’s reported sales were down 3.3% at established locations in the U.S.
Everybody needs food, but even supermarkets are hurting. Even as the population grows, it is expected sales at supermarkets will drop 1.7% this year. The problem is that the government and its policies, along with big business and the bankers, are killing off the middle class, and the average American doesn’t have enough money for shopping.
A percentage of the upper middle class is doing well and rising into the lower upper class, but a larger numbers of middle-class folks are sinking into poverty. Median household income has declined for five years in a row, despite the fact that in many homes both husband and wife now work, but all of the bills keep going up. Additionally, as part of the economic collapse, commodity prices are crashing.
Says Snyder: “Copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key leading indicators that can tell us a lot about where things are heading next.”
Copper prices, for example, have hit a six-year low. The National Post reports that Morgan Stanley expects the current downturn in oil prices to be “as severe as the one in 1986—the worst for at least 45 years . . . if oil prices follow the path suggested by the forward curve, our thesis may yet prove to be optimistic.”
Howard Davidowitz, a retail consultant, projects that half of all shopping malls across America may shut down within the next 15 to 20 years.
“Middle-level stores in middle-level malls are going to be extinct because they don’t make sense,” he said.
He added that, of the 1,000 malls in America, roughly 400 cater to upper-income shoppers, and for these malls, business is actually improving. But the lower-end malls are getting clobbered by store closings.
While all of this may sound like bad news, there is a silver lining. It may mean that the American consumer’s penchant for over spending on non-essential items is finally over and a new era of fiscal responsibility is on the horizon.
John Tiffany is copy editor for AMERICAN FREE PRESS and assistant editor of THE BARNES REVIEW. He has a Bachelor of Science degree from the University of Michigan and has done postgraduate studies in law, biology and computer science. He is devoted to the truth and lets the chips fall where they may.