- The United States still has far more retail space per capita than any other country.
- This suggests the US is still in the “early innings” of mass store closings, according to a new 50-page report by Cowen and Company.
- As more stores close, hundreds of poorly performing shopping malls will go dark.
- At the same time, sales are accepted to accelerate at the country’s top-rated malls.
But the amount of retail space in the US still far outweighs other countries, which suggests that we are only in the “early innings” of mass store closures, according to data compiled by the advisory firm Cowen and Company.
The US has about 23.5 square feet of retail space per capita, compared to 16.8 square feet of retail space per capita in Canada, and 11.2 square feet of retail space per capita in Australia, according to the report.
“Retail square footage per capita in the United States has been widely sourced and cited as being far above most developed countries – more than double Australia and over four times that of the United Kingdom,” Cowen analysts wrote in a 50-page report on the state of the retail industry. The data “suggests that the sector remains in the early innings of reduction in unproductive physical retail.”
As mass store closings continue, hundreds more malls could go dark.
The number of malls in the US is expected to drop from roughly 1,150 today to fewer than 850 within the next several years, the report says, citing the commercial real estate firm Cushman & Wakefield.
The closures will hit C- and D-rated malls the hardest. These shopping centres are already battling declining customer traffic, falling occupancy rates, and low sales productivity.
But it’s not all doom and gloom in the retail industry.
While many failing stores and malls are closing, sales are expected to accelerate at the country’s top-rated malls.
“Our take is mall performance bifurcation will accelerate as retailers continue to invest in top malls in the top metro areas at the expense of lower performing malls in secondary and tertiary markets,” Cowen analysts wrote.
And while retailers like Sears and Toys R Us have been closing hundreds of stores, dollar stores, Aldi, Lidl, and others are growing.