The list continues to grow and we’re only in March. As I explained in the video, it’s not just retail. Other companies like GM closing up plants, are a factor as well. We know that while eCommerce is an issue, at only 10% of total retail sales, it’s not the bulk of what’s going on. What do you think is happening? Is this a worsening economy?
Take a look at the situation with retail in the U.S. It looks really bad, no doubt. But the car manufactures are doing the same. If a corporation can’t be profitable, it first attempts to cut costs. Fire some people, run sales, close some poor performing locations. Then if things get desperate, they file for bankruptcy. But today, it doesn’t seem to be an issue with a particular retailer. It’s a widespread issue. All over the United States, stores are closing up shop. They just can’t become profitable. Some of these stores had been in business or decades and now things have really changed.
Take Sears as an example. This company had been pervasive at every mall, even beyond the U.S. But their massive real estate budget, rising costs, and dwindling profit ate away at their bottom line. They might be safe for now, but ultimately, they will fail. A company can no longer compete in the new world, using old world strategies.
Often times, individuals will suggest that the rise of eCommerce and Amazon has been the cause of the demise of retail and created the Retail-Pocalype that we see today. This is only partly true. The absolute fact is that retail accounts for approximately 10% of retail sales in the U.S. today. That’s hardly a large percentage of the total as many suggest. There are more factors here at play. Products are purchased at extremely low prices by these retailers who buy in bulk and mark up their prices. Wages have risen to some degree. But we should also acknowledge the rising costs of these physical locations. Rent is always rising considerably and so is the expenses such as utilities they may incur. These are very important factors to consider.
GM is closing plants in and outside of the U.S. Honda closed up shop in the UK. The dying car industry of Canada continues to dwindle. There is no stopping the offshoring of jobs as these massive corporations take their bailout money and run.
In 2019, over 4800 stores have already been announced to be closed. This is on pace to be a record year. While this is happening, there are stores opening up as well, there’s no denying that. However, they may have the same fate as these retailers that are closing up shop right now. Only time will tell. It is truly worrisome for the people who work at these stores because they will lose their income and will be looking around at other retailers for a similar job. Fewer positions available for people to apply to in the same field. In this case, retail happens to be one of the most pervasive industries in the U.S. We’ll see if big changes occur.
With the rise of automation and robotics, we are seeing more businesses specifically state that they aim to reduce the amount of employees they have and bring on the robots. This stretches from the financial companies with the Robo-Advisors, to the fast food companies using robots as well. This is on all levels of industry and it’s happening rapidly.
The bottom line here is that people who are in a situation where they rely on their single income source might be in for a rude awakening in the near future. Others who have jobs that are less outsourceable, will have some time. But if large amounts of people are out of work, the problem then effects everyone essentially. That’s what an economic downturn is all about.
Many have asked the question, if robots are taking all the jobs, who will buy all the stuff. An interesting dilemma.
What we are seeing today in the U.S. is entirely intentional. It’s widespread. Store closures will not stop, despite the grand economic boom we keep hearing about.
I don’t know about you, I’m so tired of being lied to. Quite frankly, I’ve had enough.
These retailers have announced store closures in 2019
General Motors Closing Ohio Plant | National News | US News
• Global retail e-commerce market size 2014-2021 | Statista
Honda to shut UK car plant in 2022 with the loss of 3,500 jobs | Reuters
Robo-advisor | Wealthsimple
Fast food restaurants are using ROBOT chefs because they can’t find enough workers