It’s starting to look a lot like the Great Recession redux for retailers, as more than twice as many stores have closed this year than at the same point last year, The Associated Press reports.
Bankruptcies are far outpacing last year’s rate. Retailers slashed jobs at the sharpest pace in seven years this spring. And retailers collectively could report the biggest drop in first-quarter profits since 2009.
This time, the culprit’s not the economy but shoppers whose habits have changed profoundly and permanently, as they shop online more and look for deals. The results this week from department stores like Macy’s, Kohl’s and JCPenney are expected to illustrate the latest damage by the spending shift and the dominance of Amazon.
“The first-quarter reports will show how difficult the mountain retailers will have to climb,” says Ken Perkins, president of research firm Retail Metrics. “Things are far better from an economic perspective than before when the sky was falling.” But he says people are increasingly spending on experiences and shopping on phones and tablets, “and stores are facing pressure from off-price stores and Amazon.com.”
