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100000 More Retail Stores Will Close by 2025: UBS ANALYSIS

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Michael Lasser, UBS market analyst, expects that online shopping penetration will reach 25% by 2025, up from 15% in 2019. This will result in the closing of about 10,000 stores worldwide by his estimates. In this scenario, retailers with size, such as Costco, The Home Depot, Lowe’s, Ross, Target, TJX, and Walmart, to name a few, will emerge winners capable of exploiting their wealth and scope to withstand chaos and upheaval.

While the closing of the store will differ by industry, the biggest loser will be fashion retail, with 24,000 doors set to vanish from the malls and main streets. Consumer electronics loses 12,500 doors while home furniture closes 11,300 stores. Grocery stores are expected to close 11,000 premises. And when those doors close, Lasser still expects to be under pressure from the enclosed malls.

The dominant growth of Amazon has boosted the retail sector’s pressure, particularly for store-based brands. In 2019, the online giant, Lasser says, managed approximately 190 million square feet of U.S. fulfillment space, a meteoric rise from 12 million in 2009.

At the front of the department store, Lasser expects the channel to see further closures ahead as the profitability of the store has now dropped below peak rates since the second quarter of 2005, when sales per store today reached $18.6 million compared to $10 million.

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