STREAMING NOW: Watch Now

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.

Cases: 155787

Reported Deaths: 2212
CountyCasesDeaths
Multnomah31892529
Washington21265212
Marion18486285
Clackamas13399175
Lane10287127
Jackson8407112
Umatilla766082
Deschutes595659
Yamhill378364
Linn359156
Malheur335158
Polk306942
Klamath279155
Douglas248554
Benton234416
Josephine234452
Jefferson196028
Coos149719
Union128419
Columbia127021
Wasco122126
Lincoln113320
Hood River106929
Morrow104914
Clatsop7756
Crook77518
Baker6597
Curry4296
Tillamook4142
Lake3766
Harney2736
Grant2231
Wallowa1424
Gilliam531
Sherman530
Wheeler221
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 3573549

Reported Deaths: 52491
CountyCasesDeaths
Los Angeles119295421467
Riverside2897733792
San Bernardino2867552940
Orange2614083921
San Diego2606253303
Santa Clara1107551781
Kern103422877
Fresno955481443
Sacramento935281484
Alameda807771242
Ventura77749852
San Joaquin668291126
Contra Costa62720681
Stanislaus56235949
Tulare48013761
Monterey42261328
San Mateo39059515
San Francisco34291422
Santa Barbara32050413
Solano30115164
Merced29147401
Sonoma28193298
Imperial26909635
Kings22082220
Placer19861232
San Luis Obispo19696235
Madera15496214
Santa Cruz14671183
Marin13231197
Yolo12851185
Shasta11017174
Butte10970163
El Dorado9160100
Napa905369
Sutter888097
Yuba577337
San Benito577261
Lassen562419
Tehama508652
Nevada397274
Tuolumne396059
Mendocino381643
Amador346641
Humboldt321033
Lake316441
Glenn223023
Colusa213613
Calaveras191049
Siskiyou176014
Inyo131337
Mono12144
Del Norte10035
Plumas6536
Modoc4564
Mariposa3957
Trinity3705
Sierra1000
Alpine820
Unassigned00
Medford
Clear
50° wxIcon
Hi: 64° Lo: 32°
Feels Like: 50°
Brookings
Clear
53° wxIcon
Hi: 62° Lo: 35°
Feels Like: 53°
Medford
Clear
50° wxIcon
Hi: 40° Lo: 18°
Feels Like: 50°
Medford
Partly Cloudy
50° wxIcon
Hi: 64° Lo: 32°
Feels Like: 50°
Klamath Falls
Clear
46° wxIcon
Hi: 52° Lo: 24°
Feels Like: 46°
Sunny and warm stretch continues
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events