Saturday, November 1st, 2014

Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

Michael Snyder
The Economic Collapse
February 17th, 2013
Reader Views: 5,011

Why-Are-Major-Retail-Chains-All-Over-America-Collapsing-300x210If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?¬† When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses.¬† But now it is being projected that all of them will close¬†hundreds¬†of stores before the end of 2013.¬† Even Wal-Mart is running into problems.¬† A recent internal Wal-Mart memo that was¬†leaked to Bloomberg¬†described February sales as a “total disaster”.¬† So why is this happening?¬† Why are major retail chains all over America collapsing?¬† Is the “retail apocalypse” upon us?¬† Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.¬† Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed¬†has been steadily falling¬†since 2006.¬† The top 10% of all income earners in the U.S. are¬†still doing very well, but most U.S. consumers are either flat broke or are drowning in debt.¬† The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore.¬† So retail chains all over the United States are now closing up unprofitable stores.¬† This is especially true in low income areas.

When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.

Just check out some of these store closing numbers for 2013.  These numbers are from a recent Yahoo Finance article

Best Buy

Forecast store closings: 200 to 250

Sears Holding Corp.

Forecast store closings: Kmart 175 to 225, Sears 100 to 125

J.C. Penney

Forecast store closings: 300 to 350

Office Depot

Forecast store closings: 125 to 150

Barnes & Noble

Forecast store closings: 190 to 240, per company comments

Gamestop

Forecast store closings: 500 to 600

OfficeMax

Forecast store closings: 150 to 175

RadioShack

Forecast store closings: 450 to 550

The RadioShack in a nearby town just closed up where I live.  This is all happening so fast that it is hard to believe.

But the truth is that those store closings are not the entire story.  When you dig deeper you find a lot more retailers that are in trouble.

For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.

Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.

Even Wal-Mart is going through a tough stretch right now.¬† According to documents that were leaked¬†to Bloomberg, Wal-Mart is having an absolutely disastrous February…

Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.

‚ÄúIn case you haven‚Äôt seen a sales report these days, February MTD sales are a total disaster,‚ÄĚ Jerry Murray, Wal- Mart‚Äôs vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. ‚ÄúThe worst start to a month I have seen in my ~7 years with the company.‚ÄĚ

So what in the world is going on here?

The¬†mainstream media¬†continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.

Even global cell phone sales actually declined slightly in 2012.  That was the first time that has happened since the last recession.

Perhaps it is time that we faced the truth.  The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.

Mort Zuckerman pointed this out in a recent article in the Wall Street Journal

The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.

So how can the mainstream media be talking about how “good” things are if we still have 6.4 million fewer jobs than we had back in November 2007?

And sadly, things may soon be getting a lot worse.¬† If Congress does not do anything about the “sequester”, millions of federal workers may shortly be facing some very painful furloughs according to¬†CNN

Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.

Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation’s 2.1 million federal workforce, experts say.

If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.

I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.

For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.

Business Insider recently profiled the Wind River Indian reservation in western Wyoming.  The following is a brief excerpt from that outstanding article

The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.

Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.

Even among reservations, it’s renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.

You can see some amazing photos of the Wind River Indian reservation right here.

It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.

We are a nation that is in an advanced state of decline.¬† But as long as the financial markets are okay, our leaders don’t seem too concerned about the suffering that everyone else is going through.

In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC.¬† The following is how a¬†Zero Hedge article¬†summarized that interview…

Starting at around 1:50, Greenspan states the odds of sequester occurring are very high – in fact, the playdough-faced ex-Chair-head notes, “I find it very difficult to find a scenario in which [the sequester] doesn’t happen” But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken -¬†“the issue is how does it affect the stock market.”

While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox’d and babbling Bartiromo when he admits¬†“the stock market is the key player in the game of economic growth.”

Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy,¬†“if the stock market can hold up through this, then the effect will be rather minor.”

Do you see?

As long as the stock market is moving higher they think that everything is just fine and dandy.

And the Obama administration?

They continue to pursue the same policies that got us into this mess.

Their idea of “economic reform” is to¬†threaten to sue businesses¬†that do not hire ex-convicts.

And of course now that Obama has been re-elected he is putting a tremendous amount of effort into “stimulating the economy”.

For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.

Meanwhile, the U.S. economy is getting worse with each passing day.

If you doubt that economic conditions are getting worse, please read this article: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.

When you look at the cold, hard numbers, it is undeniable what is happening to America.

And our leaders are not doing anything to fix our problems.  In fact, most of the time they are just making things worse.

So buckle up and get prepared.  We are in for very bumpy ride, and this is only just the beginning.

Store Closed Until Further Notice - Photo by Gryllida

Delivered by The Daily Sheeple


Contributed by Michael Snyder of The Economic Collapse.

Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream , The Truth and Economic Collapse Blog.

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  • JR

    Obama is running up our national debt like someone about to file bankruptcy would do with their credit cards. But hey… I hear lots of peoples gots demselfs a new obama-phone! So it can’t be ALL bad! /sarc

  • spartacus !!!!!!!

    this is nothing compared to what is coming for this “CESSPOOL” of a country!!! , read leviticus 26 and deutoronomy 28 ! , “GOD” is about to seriously kick this nation’s ass and we have earned it !

    • David B

      That’s right!! Deut 28:15-68!! If this nation would have done verse 1-14 we would be in good shape!! We will all pay!!

  • Ohevi

    I am going to be sick!

    Oh well! Not! Vacation my ass! What vile scum!

  • Floyd Jackson

    Only business doing good in my town is the gun shops!

  • Responder Dave

    People are either too poor to afford goods at those places (no ebt or snap for computers, sorry), Their values are shifting away from cheap goods (unlikely), or they are too busy buying guns and ammo. Probably a combo of all three. Starving these giant mega-corporations is a good thing.

  • jimbo

    Simple all good paying jobs outsourced. Dollar not worth what it was. Who can buy their Chinese junk,new auto or homes? So it’s a never ending spiral down the economic toilet! People get back to basics food,shelter,fix up your old ride and plant as big a garden as possible. Be conservative and turn your back on big box stores who pay slave wages. Barter with friends and hide your assets from Uncle Sam! Become more self sustainable! I pray for peace and prepare for war! Kentuckian for The Constitution!

  • Jack

    This bolsters my prediction that the shit will begin hitting the fan, in bulk, between the middle of April and the middle of March. The local property tax induced mess will fester until June through August, when the uninformed begin seeing the exploded escrow amounts on their mortgage coupons…(SNAFU)
    PS: Wally-World is essentially OUT of ammunition, and EVERYONE else is low on it. As the man told me: “If y’all ain’t got it yet, y’all ain’t gettin’ it ’till yer got”. I take that bit of philosophy to work on several levels…

  • ManCavePatriot

    The retail store closings are bad enough. Wait until the commercial R/E holders start defaulting, and you’re going to see pension funds go down the turlet.

  • 41MagMan

    Radio Shack is closing stores because, IMHO, it is a poorly managed company that is under great pressure from better run competitors. Sears used to be a men’s store for tools and work clothes. Now, it is just another everything department store, like a Target, so nothing special. I can get Chinese tools cheaper from Harbor Freight than I can from Sears. When Craftsman tools were made in the USA, I only bought them and no others. Now that they are made in China, they are no different from any other cheap tool. Other B&M stores are feeling strong competition from on-line vendors. These are the business reasons for stores closing.

    As for political reasons, look no further than the Obamunist health care nuke that will be detonating in American business in 2014. Business owners are searching for every possible reason to lay people off, go to part time workers, have less than 50 employees, and not hire anyone. This is NOT what fosters employment growth.

    Average American take-home pay has been falling for 40+ months with only a couple of small upward blips during the year end holidays. Tax receipts have also fallen during this period. THERE IS NO RECOVERY. What IS happening is that stock and other assets are being inflated via huge money printing schemes, ala various QEs. This money is keeping the US Treasury bond market from imploding and some of it is slopping over into the stock market.

    Don’t even get me started on the lunacy and tragedy of near zero interest rates. This alone is devastating savers and older Americans who cannot earn squat on their savings. They are burning through their retirement savings, just to eat, stay warm, and pay for rent and meds. Their CDs, money market accounts, and savings accounts used to provide the money that filled the gap between their pensions, retirement plans, and SS. It no longer does.

    Younger folks are no better off, though. With no reason to save, many of them are spending every last dollar of their paychecks. Some are buying extra food and other things they know they will need and that are rising in price. Buying now is cheaper than buying later, thanks to the 9.4% inflation (www.shadowstats.com) we now have. We have a great country, many natural resources, and wonderful people but those in charge need to be horse-whipped for their incompetence.

  • Anonymous

    This unsubstantiated article doesn’t take into account about how the Internet and e-commerce has gradually taken business away from traditional brick & mortar stores. Consumers only go to big box stores to “test drive” products, and then buy them online for better prices and customer service.

  • Steve

    This unsubstantiated article doesn’t take into account the rise of e-commerce and the Internet, and how it’s gradually taken business away from traditional brick & mortar stores. Consumers now “test drive” products at big box stores, and shop online to avoid inflated prices and bad customer service.

    • us citizen

      Not so. On line business has fallen drastically within the past year. Sales are down 30 to 60% because people are NOT spending.

      • Online Marketer

        I agree, my main business generates online buyers to 180+ websites that we own and operate for several online retail affiliates – our business has been declining steadily since March 2012 and online orders have dropped 34% from Jan 2012 to Feb 1st 2013. So far the entire month of Feb is down by 40% compared to the Feb 2012, and this month is not over yet ! The economy is definitely shrinking along with disposable incomes. There are more empty strip malls in my area of Southeastern Wisconsin than I have seen in 15 years – yet the news media seems to think that the economy is improving ………

  • SKIP

    I suspect one of the reasons is that many of the stores being closed are in malls that have become hunting areas for black thug gangs and are just to damn dangerous for anyone with money to visit anymore, I PERSONALLY know of several malls that have collapsed because of that very problem as do most of you..This post was not posted before, maybe it will be now.

  • sj1ofakind

    Free trade sent all of the good paying jobs overseas. Now, the stores have no customers because the customers don’t have decent jobs that pay more than what’s needed for minimum sustenance. The slave laborers overseas can’t afford the products they are making either. Ten years ago, I said this would happen and that we would eventually look like a third-world country. Well, it’s starting to resemble one now. Thanks NAFTA, GATT, & WTO! Thanks Obama for all of your new free trade agreements and your insane solution to fix the nation’s healthcare crisis buy forcing the uninsured to purchase healthcare that they couldn’t afford in the first place. They’ll not have food or shelter, but, by George, they’ll have healthcare that they won’t be able to use because they won’t be able to afford their deductible and co-pays!

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