Bed Bath and Beyond might be a canary in the coal mine.
The home goods retailer filed for bankruptcy earlier this week. And according to research by UBS, this is likely just the beginning of a surge of retail store closures.
UBS retail analyst Michael Lasser estimates that 50,000 retail stores will close by 2027. This does not include gas stations and food service. There are currently 940,000 retail stores in the US.
“While there was a pause on store closures over the last few years, we believe this activity is set to sharply accelerate moving forward,” Lasser said.
Clothing accessories and consumer electronics sectors are likely to suffer the bulk of the store closures.
Lasser pinpoints four factors impacting the retail sector.
- A slowdown in consumer spending
- A reduction of credit availability
- The rising penetration of e-commerce shopping
- Higher costs to operate retail stores
After peaking at $12.3 billion in 2017, sales at Bed Bath and Beyond collapsed. Sales totaled just $7.9 billion in 2021, its lowest annual tally since 2009.
This is yet another sign of a deep recession. In fact, during a recent interview, Peter Schiff said we’ll be lucky to escape with just a recession.
I think this is a depression. We’re probably already in it. It’s just going to get worse.”
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