Walmart and other US retailers may close 50,000 stores in the next five years

According to the report by CNN, Walmart, Nordstrom and other retailers will continue to close stores in the United States this year, and there are complicated reasons behind this.

According to the plan, Walmart will close about 20 stores in the United States this year and Nordstrom will close 15 stores. The pharmacy chain CVS announced in 2021 that it would close 900 stores within three years. According to a UBS report this year, 40,000-50,000 retail stores in the U.S. will be closed over the next five years.

Some government officials, including the mayor of New York, pointed to a surge in retail store theft as the main reason for the large number of store closures. Walgreens also cited the impact of frequent theft when it decided to close five San Francisco stores in 2021. According to the National Retail Federation's survey of about 60 retail member companies, frequent theft has become the factor that has caused the most losses to these retailers in recent years.

However, some analysts believe that the wave of store closures has been going on for many years, and the relationship with the crime rate is not close, but the relationship between supply and demand is the most critical. Under the influence of the COVID-19 pandemic, remote working methods in the United States are rapidly popularizing.

According to the U.S. Census Bureau, the number of people working from home in the U.S. rose from 9 million to 27.6 million during 2019-2021, hitting many downtown malls where commuters are the main customer base. According to a study by Stanford University, the average American office worker now spends $2,000 to $4,600 less per year in the downtown area than that before the pandemic.

Online shopping also continues to weigh on offline retail. According to the U.S. Census Bureau, in the fourth quarter of 2022, online retail sales accounted for 14.7% of total U.S. retail sales. Clothing, accessories, health care products and electronic products were the most affected by online shopping.

In addition, retailers are also greatly hit by rising labor costs and store rents. According to data from Cushman & Wakefield, an American real estate consulting company, in San Francisco, the average store rent reached US$43 per square foot in the first quarter of this year, or about 3,200 yuan per square meter. A JPMorgan study found that the number of retail storefronts in San Francisco has decreased by 6% from 2019 to 2021.