- Roughly 75,000 more stores will be forced to close across the United States by 2026 due to the rise of e-commerce, according to a new UBS report.
- Analysts predict that e-commerce penetration is set to reach 25% over the next seven years, forcing retailers to shut thousands of stores.
- In 2018, Amazon added $US35 billion in retail sales across America – the equivalent of roughly 7,700 stores.
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The retail apocalypse is far from over.
As e-commerce sales continue to grow, tens of thousands of stores are set to shutter, according to a report released by UBS on Tuesday.
Analysts predict that e-commerce penetration is set to rise to 25% by 2026, up from its current position at 16% of total retail sales. If that happens, roughly 75,000 retail stores – excluding food – will have to close up shop over the next seven years.
“We calculate that for every 100 bp increase in e-commerce penetration, 8,000 – 8,500 retail establishments would need to close in order to maintain a 2% increase in sales per store (to cover rising costs such as wages),” the report states.
E-commerce is already eating up an increasing amount of retail sales. In 2018, Amazon added $US35 billion in retail sales across America, according to UBS. That’s the equivalent of roughly 7,700 stores.
UBS predicts that clothing stores are going to be hit the hardest, closing an estimated 21,000 stores – or 17% of all clothing shops across the US – by 2026. Electronics and home furnishing stores are also expected to close thousands of stores, with the electronics category expected to shutter about 10,000 and home furnishing to close roughly 8,000.
More than 5,800 store closures have been announced so far in 2019, as retailers including Victoria’s Secret, JCPenney, and Gap shutter dozens of locations. 1,100 closures were announced in a single day in March. And, 11 retailers have already filed for bankruptcy or liquidation so far this year.
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