Economy
Related: About this forumPlagued Retail: View from the Trenches
Plagued Retail: My View from the Trenchesby John McNellis Jun 25, 2020
Weve lost half-dozen retailers restaurants, clothing, massage Tenants who in effect said, sue me, Im taking a hike. And replacement shop tenants are just behind spotted owls on the endangered species list.
By John E. McNellis, Principal at McNellis Partners, for WOLF STREET:
I have 2 options that are non-negotiable. Im going bankrupt (chapter 7). Covid happened and I cannot survive. Id rather not go through bankruptcy because it ruins my credit, but if I have no choice, I wont think twice. The second option is to let you keep my deposit, and take what I have in the bank which is around 10k. Again this is non-negotiable. That is all I freakin have.
This tenants sad bankruptcy threat sets the table for examining our retailsupermarket-anchored neighborhood shopping centersin the Covid-19 era. Embellishing only slightly, we have two kinds of tenants: those that cant pay and those that dont wish to.
In short, bricks and mortar retail has been caught in a pincer movement, flanked on one side by Covid-19 itself, and on the other by its cure. You know this already: The virus separated us, the cure institutionalized that separation, forcing a societal shutdown that has driven us into our deepest recession in perhaps living memory, a recession that seems certain to run several years. The coronavirus means we will remain wary of one another until theres a vaccine, perhaps longer; the cure means the majority of Americans will have little to spend.
What does this portend for our retailers? Putting aside kids swarming the beach towns, few of us wish to take more risks than necessary. Driving on a freeway entails an infinitesimal risk, but we do it to get somewhere; going shopping now involves a minute risk, but we accept it if the shopping is essential. (As an aside, we had no idea we were in the essential retail business until this year.)
Our essential retailerssupermarkets, drug stores, banks, convenience stores and gas stationsare doing fine; in fact, groceries and gas are killing it. Someones idea of essential, liquor stores and cigarette shops, are not complaining either. ...............(more)
https://wolfstreet.com/2020/06/25/plagued-retail-my-view-from-the-trenches/
Warpy
(111,256 posts)with strip malls around here sporting lots of empty store fronts.
Part of the reason is the number of chains taken over by vulture capitalism that then bled them dry. Another factor is the relative ease of online shopping for things like electronics and small appliances. The biggest factor is the decline in the purchasing power of wages over the last 20 years. People just don't have money enough to go recreational shopping, that's the main thing driving the collapse of the indoor shopping mall.
Now that people who have been out of work for 2-3 months are having to play catch-up on bills like car and credit card payments, that process is only going to accelerate. There is no seed money out there for entrepreneurs to take their places.
With the death of all but the big box stores, the jobs of last resort will go too.
I don't think the Republicans have any idea about what's going to hit them in the next 6 months as they try to prop up the stock market in the face of a collapsed economy.