Store closures have become a growing trend, with big boxes such as Walmart, J.C. Penney, Sears, Kmart and others shuttering or planning to close scores of locations.
The reason is neither declining retail sales, nor entirely because of e-commerce, The Atlantic magazine reports.
“So what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly,” The Atlantic article says.
Here are The Atlantic‘s suggestions for the reasons retail sales are growing but stores are rapidly closing:
- Shoppers are shopping online more, using mobile apps to make purchases more often and taking advantage of easier returns. “There will always be a place for stores. People like surveying glitzy showrooms and running their fingers over soft fabrics,” the article says. “But the rise of e-commerce not only moves individual sales online, but also builds new shopping habits, so that consumers gradually see the living room couch as a good-enough replacement for their local mall.”
- The U.S. has more malls than it needs, and when a few important stores in a mall close, others follow. “The failure of one or more department stores can ultimately shutter an entire mall,” the article says.
- Americans are buying possessions less often and paying for more experiences, such as vacations and dining out. According to The Atlantic, “[The] recent meltdown for retail brands is equally about the legacy of the Great Recession, which punished logo-driven brands, put a premium on experiences (particularly those that translate into social media moments), and unleashed a surprising golden age for restaurants.”