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"20 Facts About The Great U.S. Retail
Apocalypse That Will Blow Your Mind"
by Epic Economist
"The U.S. retail apocalypse is a slow-motion disaster that never seems to end. While several brands spent decades building their businesses, attracting their base of customers, investing in real estate space, and perfecting their products to become respected household names, the advent of e-commerce changed the entire game in just a few years, and everything businesses thought they knew was put into question as they rushed to adapt to a new market that moved much faster and where shoppers had significantly more choices. The after-effects of the financial crisis led to several waves of mass layoffs and store closings that left many companies standing on very thin ice, and the stock market volatility that followed ended the journey of many retailers that were on our landscape for over a century. In 2017, the period commonly known as the start of this whole process, over 9,000 stores were permanently shut down as foot traffic at shopping malls drastically declined. But the truth is that this crisis had been developing for nearly fifteen years before the industry finally reached its breaking point.
Since then, thousands of popular brands have filed for bankruptcy and gone out of business, and for the first time in history, shopping malls actually faced the threat of extinction. One thing all retail experts note is the fact that neither the rise of online shopping platforms nor the financial turbulence that marked this period can completely explain why so many successful businesses failed almost overnight. One of the most notable trends driving the downfall of retailers is the steady decline of the U.S. middle class. Since the year 2000, it is estimated that U.S. middle-class Americans lost 35% of their purchasing power, with 5% of that loss happening over the last two years. From that period to this day, almost 22 million workers have fallen out of the middle class given that wages stagnated but the cost of living has increased by almost 4.5 times only in the past decade.
Of course, the advent of the pandemic caused even more damage to the retail industry and this income group. In fact, this holiday season is the first in nearly 14 years where businesses in all categories saw sales contracting instead of rising. The troubles faced by retailers were exposed and aggravated by the effects of the health-crisis-induced downturn, and after things started falling apart, one problem led to another and another and another, creating a downward spiral that companies are making this scenario even scarier for many businesses up until this day.
With mass layoffs being announced on a weekly basis, businesses facing the tighter credit conditions in decades, and consumers rolling back their spending amid rising living expenses, it's safe to say that a series of disappointing corporate earings results is coming next, and with it more announcements of store shutdowns and bankruptcy fillings are likely to arise. A lot is at stake still, and we will watch many more developments in 2023 as we head towards another economic recession, but today, we decided to gather 20 surprising facts about the U.S. retail apocalypse that many of you out there may not know yet."
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