Retail consultant predicts 200,000 stores to shut down in the next 4 months

[w¡n9Nµ7 §£@¥€r 123]

I don't know about you, but I am worried about our country's malls and shopping centers.

They are dying. A few every day in every city of the U.S.

The really hard news will fall after the last Big Shopping Season of the year - Christmas.

It isn't going to be pretty. Consumers are frugal. They are trading down.

All of the national industry trade associations, which generally pitch loudly for their markets, are sounding sad these days.

The National Retail Association suggests the vacancy rate for retail properties will rise to 12.7 percent in the third quarter of this year--up from 9.8 percent in the same 2008 period.

ShopperTrak's Retail Traffic Index reported mall foot traffic dropped by 16.4 percent in the first quarter and is expected to be in the same range or higher for the rest of the year.

The International Council of Shopping Centers previously forecast 73,000 stores will close in the first half.

Howard Davidowitz, chairman of New York City-based Davidowitz & Associates, predicts more than 200,000 stores will be shuttered by the end of this year. Davidowitz & Associates is a national retail consulting and investment banking firm.

Mall owners and developers are extremely worried. Few shoppers realize mall owners and developers actually pay anchor retailers to become shopping center tenants.

And the payment isn't chicken feed, as they used to say. It's in the area of $2 million to $6 million per store. That fact comes from Davidowitz himself.

So where are the nation's consumers spending their money?

Wal-Mart Stores, for one place.

But even this titan retailer reported a flat second-quarter profit compared with second-quarter 2008. Still, punching up $3.44 billion in the quarter that ended July 31, isn't too shabby, as they also used to say.

A year ago at this time, Wal-Mart recorded a profit of $3.45 billion. Shareholders earned 88 cents a share this year. A year ago, they earned 87 cents.

So what does all that prove? Almost every other national retailer lost money in the first half. And almost every one of the losers was located in a shopping center or mall.

But Wal-Mart stands alone. Their stores are in no shopping centers or malls.

Maybe that's just a coincidence. Maybe it isn't.

But one thing is crystal clear: When the next round of shopping center closings occur, thousands of jobs and millions in property taxes to communities will be lost.

http://www.realestatechannel.com/featured-...h-alex-1286.php

[Otto 83]

Not surprising at all - the retail downturn has been relentless for the past 2 years (when it really began) - the little guy's suffering the most (not that mall owners/developers are the small guy, they're not.) - no SBA help at all - only the fittest (deepest pockets) will survive - but hey! AIG and the like can grow and prosper..

[Ban Hammer 14,573]

before too long, claudeth won't have anywhere to spend jasman's money.

[ScottThuy 140]

The same thing that has happened with the banks in some respects is happening with retailers and other small buinesses. The big banks got so strong with the nod of govt that they "were to big to be allowed to fail" and had already pushed most of the small guys out of the market. Then when the big guys fail, who steps in? big bro. again? we know that the small guys are folding up.. the big guys are also folding up... the small stores that help keep the malls and strips going are folding... that will increase unemployment at a slower but steady pace... housing values are still decreasing as foreclosures are not declining... we are actually seeing more commercial foreclosures in my area... there are still plenty of dominoes to fall before the game is over... which ones will remain standing? will we see a revitalization of small businesses and entrenpreuership as was the case decades ago?

[Danno 1,228]

As a person who is trying to hang on myself, I really notice the number of businesses shut down or shutting down. We have small shopping areas finished but no tenants.

Even these new Medical plazas which have sprung up here and there are full of vacancies.

Yet oddly enough I do see a few businesses trying to open their doors, yesterday I noticed a BBQ place hanging their sign in the same place a Sub-shop failed.

I have a guy who opened a Coffee shop across the street, I think he is still in business.. though I don't see how. (not a very good spot).

I actually feel a little guilty I have not tried to stop in more often, but maybe I will make a point of it today... even though I don't often by those over priced drinks.

[one...two...tree 2,762]

As a person who is trying to hang on myself, I really notice the number of businesses shut down or shutting down. We have small shopping areas finished but no tenants.

Even these new Medical plazas which have sprung up here and there are full of vacancies.

Yet oddly enough I do see a few businesses trying to open their doors, yesterday I noticed a BBQ place hanging their sign in the same place a Sub-shop failed.

I have a guy who opened a Coffee shop across the street, I think he is still in business.. though I don't see how. (not a very good spot).

I actually feel a little guilty I have not tried to stop in more often, but maybe I will make a point of it today... even though I don't often by those over priced drinks.

Danno, may I ask - what line of work do you do?

[thepizzadude 26]

It is tough on the little guy...I am one. Business has slowed in the past year for sure but that is not all that has our back against the wall. Before all this economic turmoil began we were already feeling the pinch. Prices on everything had risen due to the $4.00+ gasoline, all my purchases had seen an increase in the neighborhood of 20-30%. Then Uncle Sam raised the minimum wage (THANKS TED) so my 16-19 year old school kids could make ends meet. Along with the minimum wage increase comes increased medicare and social security matching funds from my business on top of the additional workmens comp insurance payment because its all figured off payroll. So a 30% increase in food and packaging cost, 40-45% increase in payroll costs and 10-15% increase in insurance costs is really hurting.

I am starting to wonder if after 9 years I should be doing something else now, I am sure not many people would adjust well to a large pizza that 2 years ago was $15.00 increasing to $21.00 just so I can stay here.

Anyway enough of the ranting...

[w¡n9Nµ7 §£@¥€r 123]

... 30% increase in food and packaging cost, 40-45% increase in payroll costs and 10-15% increase in insurance costs ...

Ouch.

[HAL 9000 96]

Quite a lot of adults on minimum wage.

[ScottThuy 140]

It is tough on the little guy...I am one. Business has slowed in the past year for sure but that is not all that has our back against the wall. Before all this economic turmoil began we were already feeling the pinch. Prices on everything had risen due to the $4.00+ gasoline, all my purchases had seen an increase in the neighborhood of 20-30%. Then Uncle Sam raised the minimum wage (THANKS TED) so my 16-19 year old school kids could make ends meet. Along with the minimum wage increase comes increased medicare and social security matching funds from my business on top of the additional workmens comp insurance payment because its all figured off payroll. So a 30% increase in food and packaging cost, 40-45% increase in payroll costs and 10-15% increase in insurance costs is really hurting.

I am starting to wonder if after 9 years I should be doing something else now, I am sure not many people would adjust well to a large pizza that 2 years ago was $15.00 increasing to $21.00 just so I can stay here.

Anyway enough of the ranting...

food costs are a killer today! Its amazing how little food costs overseas compared to here. I blame it on the lack of small farmers... an example.. in SE Asia it is rare to sea a 1/2 acre sitting unused... It has something planted on it... one can see food growing everywhere in every form.. real estate is so focused on development here rather than production... a city would rather a lot sit vacant than to allow a group of citizens to grow a crop on it... wouldn't it be nice to buty those peppers tomato's and onions etc. from a local farmer rather than the guy that buys his stuff from far away? Crop subsidies dont help the price of flour either... Hey Mr farmer, we need to keep the price of grain up, so we will pay you to not grow any this yar... ####### kinda idiotic idea is that? I know it is no comfort or a solution to the current situation... at least not short term, but it did used to be that way a long time ago in the US...

The taxes and insurance wont go down given the current financial situation in the US... it sux that I see a large pie shrinking every year . A large is now the same size a medium used to be and some folks are calling a small a medium and a small just doesnt exist in some places... all so someone can cut costs on a pie.

[Heracles 417]

I spoke to a few farmers on the weekend. The problem with food prices that I have observed, especially regarding healthy food, is that few if any farmers grow it here. Everyone seems to grow the run of the mill corn, soy beans, cotton etc. Whereas, the majority of farms surrounding cities in AUS grow vegetables and various other produce. For example, why the heck are my salads coming from CA?

But you know what, America made its bed so now it has to lie in it. Maybe you guys shouldn't have been so worried about what the steelers are doing this season or what is happening on E!. Maybe people should have paid attention to the true price of walmarts cheap prices. The chickens have certainly come home to roost.

Its not doom and gloom but everyone has to get their ###### together before you end up a 2nd world country 'again'. Just today I saw people, who are most likely illegals, landscaping the neighborhood. Jobs that could be going to Americans that are living in their car as we speak. Californian's are having their services cut while not a single word has been said, quantified, about the money being spent on service towards illegals. I had a lib friend from Aus, who's a teacher, just the other day jokingly ask whether we are still funding ESOL, while American schools and teachers are facing cuts.

Edited August 28, 2009 by haza

[Pinocchio Liberal 268]

I spoke to a few farmers on the weekend. The problem with food prices that I have observed, especially regarding healthy food, is that few if any farmers grow it here. Everyone seems to grow the run of the mill corn, soy beans, cotton etc. Whereas, the majority of farms surrounding cities in AUS grow vegetables and various other produce. For example, why the heck are my salads coming from CA?

But you know what, America made its bed so now it has to lie in it. Maybe you guys shouldn't have been so worried about what the steelers are doing this season or what is happening on E!. Maybe people should have paid attention to the true price of walmarts cheap prices. The chickens have certainly come home to roost.

Its not doom and gloom but everyone has to get their ###### together before you end up a 2nd world country 'again'. Just today I saw people, who are most likely illegals, landscaping the neighborhood. Jobs that could be going to Americans that are living in their car as we speak. Californian's are having their services cut while not a single word has been said, quantified, about the money being spent on service towards illegals. I had a lib friend from Aus, who's a teacher, just the other day jokingly ask whether we are still funding ESOL, while American schools and teachers are facing cuts.

I thought you were in DC? Last I checked hmmmm DC didnt have farmland.

[Heracles 417]

I thought you were in DC? Last I checked hmmmm DC didnt have farmland.

Virginia bro. You couldn't pay me to live in DC with those Marion Barry loving Douche bags.

[Pinocchio Liberal 268]

I thought you were in DC? Last I checked hmmmm DC didnt have farmland.

Virginia bro. You couldn't pay me to live in DC with those Marion Barry loving Douche bags.

Yeah, well last I saw you were wantin to kik someone a$$ in DC! Your nuttin but an empty suit!

[natty bumppo 297]

I thought you were in DC? Last I checked hmmmm DC didnt have farmland.

Virginia bro. You couldn't pay me to live in DC with those Marion Barry loving Douche bags.

Yeah, well last I saw you were wantin to kik someone a$ in DC! Your nuttin but an empty suit!

dc area of virginia ... you can have it. traffic sux ...