The retail world continues its downward spiral, as holiday sales failed to meet expectations and wary consumers are keeping their wallets in their pockets due to rampant inflation and soaring interest rates.
Just to be clear: 2022 Christmas holiday sales did increase from the prior year; it’s just that expectations were primed for an even higher increase after two years of the pandemic.
Retail sales jump 7.6% during critical holiday shopping seasonhttps://t.co/GhGjZ1sdYF
— FOX Business (@FoxBusiness) December 27, 2022
The end result: over 800 big-box stores are slated to shut down across the country in 2023.
Bed Bath & Beyond, Walmart, Gap, and Party City are among the big names who will be downsizing. Bath & Beyond, which narrowly escaped bankruptcy proceedings earlier this month, is the biggest loser, aiming to cut its number of stores to 480 when it once had over 1,500 locations.
At least 416 stores have been identified for closure, along with all 65 of its locations in Canada. Thirty-five will close in California alone.
I don’t really think that BB&B’s ousting of My Pillow maker Mike Lindell is the cause of all their struggles, but it didn’t help:
Exactly why I stopped shopping at bed, bath and beyond.
Go woke, go broke. https://t.co/3CpEToXWkN— Karen (@GoingBySophie) February 10, 2023
Next up is homegoods outlet Tuesday Morning, which will close 265 stores as it struggles to survive through bankruptcy proceedings. Once again, California will be hardest hit, with 30 stores shutting their doors.
Macy’s, Big Lots, JCPenny, and even Amazon Fresh grocery stores also have plans to shutter locations.
What’s going on here? CNBC explains:
For retailers, the shopping season’s results reflect the challenges ahead. As Americans continue to pay higher prices for groceries, housing and more month after month, they are racking up credit card balances, spending down savings and having fewer dollars for discretionary spending.
Plus, retailers are following years of extraordinary spending. During the Covid pandemic, Americans fought boredom and used stimulus checks by buying loungewear, throw pillows, kitchen supplies, home theater systems and more.
Party City, the ubiquitous entertainment supply chain, has filed for bankruptcy and is in the process of auctioning off many of its leases. NJBIZ reports:
A month after filing for Chapter 11 bankruptcy protection, Party City Holdco Inc. is looking to shrink its retail footprint as part of an expedited financial restructuring.
In a Feb. 16 filing with U.S. bankruptcy court, the Woodcliff Lake-based operator of 800-plus stores said it is working with A&G Real Estate Partners to auction off leases for 12 underperforming locations in six states. In coming weeks, additional lease auctions will follow, with the total number of closures depending on the outcome of ongoing negotiations with landlords, according to A&G.
Unfortunately, this is not a new trend. CVS, Rite-Aid, Kroger, Nordstrom, and Best Buy have also been quietly culling their stores over the last several years. Another factor: many locations are closing simply because they’re not safe to operate as lax laws and woke prosecutors have turned many spots into virtual free-for-alls for organized shoplifters.
Is this the end of the world of physical shopping? Many of these trends were already happening before the pandemic hit; the COVID calamity just worsened the fate of brick-and-mortar stores and basically handed billions of dollars in purchases to internet retailers like Amazon as people were locked in their homes.
But economies move in waves, and there are peaks and valleys. I don’t think we’ve seen the permanent end of malls and physical stores quite yet. Humans are social, and the thrill of online shopping is already starting to fade for many. They want to see the goods, feel the merchandise, talk to people.
In a rare good sign, January retail sales were actually sharply up as consumers took advantage of post-Christmas sales. Biden’s inflation will hopefully ease over time, if history is a guide, and things will return to normal.
That being said, as former President Obama once said about Biden, “Don’t underestimate Joe’s ability to f*** things up.”