U.S. retailers could close more than 50,000 stores by the end of 2027

UBS analyst Michael Lasser predicts that U.S. retailers could close more than 50,000 stores by the end of 2027.

Inflation remains the biggest challenge

"The pace of store closures will accelerate due to slower consumer spending, reduced credit availability and increased e-commerce penetration," Lasser wrote in a research note, adding that small independent retailers will take the lead in bearing the impact of the economic slowdown. Over the past 10 years, more than 40,000 stores with fewer than 20 employees have closed. UBS estimates that U.S. retailers have closed more than 2,000 stores in the past year alone.

More than half of small businesses say inflation remains their biggest challenge, according to the U.S. Chamber of Commerce's Small Business Index. These businesses have been struggling to stay afloat as operating costs rise and profit margins shrink.

According to a Bloomberg report, the US retail industry is increasingly worried about the strike at the west coast ports. The continuation of the strike may trigger another nationwide supply chain chaos. The economy may have to absorb the shock if the largest U.S. port complex closes due to workforce disruption.

A report released by the National Association of Manufacturers in the United States in 2022 shows that strikes at west coast ports may cause economic losses of US$500 million per day. If the strike lasts for 15 days, 41,000 Americans in the industry chain will lose their jobs.