Retailers are taking drastic measures to keep their shops open — including closing other stores in record numbers.
“Since the start of 2014, retailers have announced the closure of more than 2,400 units, more than double the closures at this point in 2013 [940 units],” Michael Exstein, a retail analyst with Credit Suisse, wrote in a recent report.
While the Commerce Department last week said retail sales edged up 0.1 percent in April, that’s a sharp drop from the 1.5 percent increase in March. The report cites sales declines in furniture, electronic and appliance stores, restaurants and bars, and online retailers.
“The consumers are catching their breath after a rebound from the winter freeze, but we do remain on track to see stronger consumer spending . . . through the remainder of this year,” said Robert Dye, chief economist at Comerica.
“After several years of attempting to cut overhead costs, the acceleration in store closures appears to be a response on the part of retailers to cope with the challenge of e-commerce and structural declines in foot traffic,” Exstein wrote.
“The year-to-date totals for store-closing activities now challenge 2009 . . . for the highest number of store closings announcements,” he added.
Economists point to the weak growth at the start of the year as having probably made households more careful about spending.
“It’s possible that consumers are being a bit more cautious in their spending habits as they await confirmation that the economy is, in fact, poised to reaccelerate,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.