But there’s still plenty of brick-and-mortar uncertainty
Not long ago, the future of brick-and-mortar stores looked dicey. The rise of e-commerce, combined with COVID-19, threatened to gut Main Street business districts. Merchants were urged to prepare for a post-store future.
For many retailers, the apocalypse never hit as hard as feared. Retail chains today are opening many more stores than they’re closing, while vacancy rates in shopping centers have hit the lowest levels in two decades. Online retailers such as Wayfair are getting in the act with showroom-style stores of their own.
Under pressure, retailers have innovated, showing once again how adaptability is among America’s greatest economic strengths. The U.S. consistently outshines other countries at making the changes necessary for businesses to thrive in the future.
No question, certain retail sectors continue to suffer. Witness the vacant storefronts in downtown Chicago and the empty indoor malls in the suburbs. Department stores remain mired in an identity crisis.
Some chains have failed to adapt to changing tastes, such as Express, a workplace apparel provider that missed the memo about working from home. Others such as downscale Family Dollar struggle to weed out hundreds of underperforming stores while continuing to open new outlets in better locations.
Retailing is a sensitive barometer for the economy at large. Consumers, weary of inflation, aren’t spending like they did in the first few post-pandemic years, and certain sectors such as fast food are feeling the belt-tightening more than others. But the consumer remains reasonably durable. Will they remain that way?
Amazon sent a chill through the retail industry earlier this month when it reported slowing online sales in the second quarter and pointed out that consumers are looking for bargains. That’s hardly surprising news, but investors took it as a warning of weakness ahead.
The U.S. economy could be at a tipping point, as uncertainty weighs on consumers and businesses. We’re in a period of significant uncertainty, as this page highlighted recently. Unemployment is ticking up, and markets are jittery after a bullish run.
As the economy slows, all eyes turn more than usual to the U.S. Federal Reserve. Has the Fed moved too late to make the cost of money cheaper? There’s more angst in the air that they’ve dithered too long, but time will tell, of course. The central bankers are widely expected to cut rates next month and again in November.
As bellwether companies such as Walmart prepare to report financial results in the days to come, reasonable people can’t be blamed for worrying.
Buy local seems to carry more resonance today than it has in recent times. That’s all to the good. But the intense woes of major retail thoroughfares continue with no obvious answers in sight. A truly healthy retail sector will need both the local and the luxe.
