The truth about the retail apocalypse

There were a record number of store closings in 2017. But in that same year low-price and premium retailers saw strong sales. So is the hype about the retail apocalypse overblown? CNNMoney's Paul R. La Monica explains why the industry isn't struggling as much as you think.

Posted: Jul 4, 2018 10:02 AM
Updated: Jul 4, 2018 10:27 AM

America's malls haven't been this empty in nearly six years.

The vacancy rate at metro and regional malls around the United States hit 8.6% last quarter, the highest since the end of 2012, according to data released Monday by real estate research firm Reis.

Back then, the economy was still working its way out of a recession and an excess of malls had been built in the preceding decades. Retail vacancies peaked at 9.4% during the middle of 2011.

"We were over-retailed," said Barbara Denham, a senior economist at Reis. "The recession knocked a lot of stores out of business," she said.

Circuit City, the big box electronics store that filed for bankruptcy in 2008, "was a big driver of the vacancies," she said.

Related: Retail defaults soar to record high in 2018

Today, the growth of online shopping is one of several factors taking a toll on brick-and-mortar retail stores.

Although online sales still make up less than a tenth of total retail sales, they're growing at around a 15% clip per quarter— much faster than purchases at brick-and-mortar stores.

The shift online contributed to the worst quarter in nine years for neighborhood and community shopping centers.

The vacancy rate last quarter, 10.2%, was higher than at malls in part because of hundreds of Toys "R" Us store closures.

Related: 700 empty Toys 'R' Us stores. Who's going to fill them?

Vacancies at local shopping centers increased in more than 70% of metro areas. Indianapolis, Dayton, and Wichita had the highest rates in the country.

Other retail chains are shutting their doors at a rapid pace, further hurting malls and shopping centers. The number of major store closings in 2017 more than tripled to a record 7,000.

Related: Retail's toughest year: A record for store closings

This year is on track to top last year's mark. More than 4,100 major retail stores closed so far in 2018, according to Coresight Research, a retail think tank.

Six hundred Walgreens have closed this year, while Bon-Ton, Sears and Kmart, Best Buy, Signet Jewelers, Mattress Firm, and GNC have all closed 200 stores or more this year. Claire's, Foot Locker, and The Children's Place have closed 100 or more locations.

—CNNMoney's Chris Isidore contributed to this story.

Oregon Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 4335

Reported Deaths: 157
CountyConfirmedDeaths
Multnomah118161
Marion98126
Washington74718
Clackamas31711
Deschutes1270
Umatilla1213
Linn1189
Polk10012
Lane773
Yamhill707
Jackson670
Benton565
Clatsop450
Jefferson440
Klamath440
Malheur320
Coos310
Douglas270
Wasco261
Josephine241
Hood River220
Lincoln170
Columbia160
Morrow120
Curry70
Union60
Tillamook60
Crook60
Wallowa20
Lake20
Sherman10
Harney10
Grant10
Baker10
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 117215

Reported Deaths: 4305
CountyConfirmedDeaths
Los Angeles572192448
Riverside8155342
San Diego7554269
Orange6574150
San Bernardino5501208
Alameda351597
Santa Clara2819143
San Francisco258743
Kern237639
San Mateo218884
Tulare200489
Fresno188236
Imperial179829
Santa Barbara166912
Contra Costa150637
Sacramento143958
Ventura116434
Kings11375
San Joaquin98235
Stanislaus75029
Monterey57110
Sonoma5664
Solano54622
Marin50115
Merced3017
San Luis Obispo2781
Placer2289
Santa Cruz2172
Yolo21324
Madera1143
Napa1133
Humboldt1023
El Dorado960
San Benito882
Butte511
Sutter462
Del Norte460
Nevada421
Shasta394
Mono371
Mendocino300
Yuba301
Lake260
Inyo201
Glenn170
Mariposa161
Calaveras150
Amador100
Siskiyou80
Colusa70
Lassen50
Tehama51
Plumas40
Tuolumne40
Alpine20
Sierra10
Trinity10
Unassigned00
Medford
Clear
73° wxIcon
Hi: 86° Lo: 52°
Feels Like: 73°
Brookings
Clear
55° wxIcon
Hi: 66° Lo: 51°
Feels Like: 55°
Crater Lake
Clear
68° wxIcon
Hi: 79° Lo: 46°
Feels Like: 68°
Grants Pass
Clear
72° wxIcon
Hi: 84° Lo: 50°
Feels Like: 72°
Klamath Falls
Clear
68° wxIcon
Hi: 82° Lo: 45°
Feels Like: 68°
Warm & dry Thursday
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events