Report says more retail stores will open than close this year
While RadioShack, Sears and other big-name retailers expect to shutter thousands of stores this year in the face of growing online competition, the retail sector is still growing, according to a recent report from research and advisory firm IHL Group.
IHL found that for every company closing a store, 2.7 companies are opening stores.
The Tennessee-based firm, which looked at chains with 50 or more locations, also found that retailers and restaurants are opening 4,080 more stores than they are closing this year.
The report cites 14,248 openings compared with 10,168 closures.
Many closures are tied to RadioShack and fashion-related companies, whose sales have been hit by growing online options and fast-fashion competitors.
Store growth, meanwhile, is coming from discount retailers and convenience-store chains — a list that includes Dollar General, Dollar Tree, 7-Eleven, Aldi, TJ Maxx, Lidl and Five Below, along with fast-food and fast-casual restaurant chains.
Deep-discount retailer Ollie's Bargain Outlet Holdings, based in Lower Paxton Township, was not mentioned by IHL, but it also has been growing. The off-price retailer has added a few dozen new locations each year.
CEO Mark Butler highlights the company's growth in this week's print edition of the Business Journal.
Some of the growing restaurant brands cited by IHL for opening stores are Dunkin' Donuts, Chipotle, Smoothie King and Chick Fil-a.
When it comes to store closures, IHL found that 16 chains account for nearly half of the total.
The picture is brighter for most retailers. IHL said 42 percent of retailers have seen a net increase in stores, while 43 percent report no change.
In fact, retail sales are up $121.6 billion through July compared with the same seven-month period a year ago, according to IHL.
But retail will continue to evolve, the report noted, as many brands adjust to changes in consumer behavior and a rise of new competitors, including e-commerce companies. Disposable income levels also remain stagnant for many shoppers, which should fuel the discount segment.