Analysts Expect 75,000 U.S. Stores to Close By 2026

The more the U.S. e-commerce sales flourish, the more clothing retailers, consumer electronics companies and home furnishing businesses will need to close their stores, UBS said in a news analysis.

With each 1% increase in online sales, some 8,000 to 8,500 stores will need to close, the report warned, meaning that around 75,000 stores will be forced out of business by 2026.

“Store rationalization needs to accelerate meaningfully as online penetration continues to rise,” the analysis noted.

“We believe this pace of store productivity improvement is unlikely to be sustained in 2019 as the boost from fiscal stimulus fades. This will likely lead to an acceleration in physical store closures in the upcoming year,” it added.

According to estimates in the U.S., 21,000 clothing stores out of the current 82,200 are expected to shut down, as also 8,000 out of 25,300 home furnishings stores will drop out of the business. The number of grocery stores is expected to fall by 7,000, from current 89,500 levels, if online penetration rises to 10% from its current 2% level.

This year alone, more than 5,000 stores closed their doors including those belonging to brands like Gap, Victoria’s Secret, Charlotte Russe and Gymboree, according to a tracker by Coresight Research.