Brick & Mortar Meltdown Pummels These Stores the Most

Only about half of retail is under attack from e-commerce, but that half is getting crushed.

E-commerce sales in the first quarter soared 16.4% from a year ago to a new record of $123.7 billion (seasonally adjusted), according to the Commerce Department this morning. E-commerce includes sales by online retailers such as Amazon but also by the online operations of brick-and-mortar retailers, such as Walmart, Target, or Macy’s. Over the past five years, e-commerce sales have doubled:

Many observers keep pointing out that e-commerce still accounts for only a small part of total retail sales — in Q1 a new record of 9.3%. And so these observers say the brick-and-mortar meltdown isn’t happening. But it’s not that simple.

There is a bitter reality hidden under these averages: Some retail sectors are getting totally crushed by e-commerce, but others remain largely resistant for now – and this has been borne out by retailer bankruptcies and liquidations over the past three years.

How did brick-and-mortar retail do on its own?

Total retail sales in Q1 – e-commerce and brick-and-mortar combined, but excluding sales at restaurants and bars – increased 5.3% year-over-year to $1.31 trillion.

Retail sales without e-commerce in Q1 rose 3.4% from a year ago.

The “online resistant” bunch: These are brick-and-mortar sectors whose sales have not massively migrated online, for various reasons, including the nature of the product. Most prominently: Gas stations, auto dealers, and grocery and beverage stores. These “online-resistant” sectors combined account for over half of all brick-and-mortar sales. In Q1, their combined sales rose 4.6% to $610 billion.

The “under-attack” bunch: Most of the remaining sectors are under all-out attack from e-commerce. And sales at the “under-attack” sectors edged up only 2.1% in Q1, below the rate of inflation as measured by CPI, even as e-commerce sales surged 16.4%. This chart shows how e-commerce is eating into the share of the brick-and-mortar retailers that are under attack:

But even that chart averages out the meltdown in specific sectors. Some brick-and-mortar sectors have already been largely wiped out, such as music stores and video stores. Others have been decimated by e-commerce, such as sales at book stores and toy stores, including Toys “R” Us which is currently being liquidated.

Department store sales peaked in 2001 and have since plunged 36%, despite inflation and population growth. Even the most iconic names in the sector have been shuttering stores and laying off people. Bon-Ton Stores is currently being liquidated. This chart shows department store sales versus e-commerce sales:

Other Brick-and-Mortar Losers are included in the categories in the chart below:

  • Green line: Sporting goods, hobby, book, music, toy, and game stores: their combined sales are down 1% over the past 10 years, despite inflation and population growth.
  • Blue line: Electronics & appliance stores: sales are down 22% over the past 10 years.
  • Yellow line: Shoe stores. Their sales peaked in Q1 2016 and have since declined 3.5%, while online shoe sales have boomed, something that 15 years ago, few people believed could ever happen because, like, you need to try on shoes:

The under-attack retailers that are losing the battle against e-commerce are precisely the stores that populate shopping malls. Department stores tend to be the anchors, and smaller stores fill in the rest. This problem for mall landlords – despite feverish industry rhetoric to the contrary – is simply going to get worse.

Consumers will continue to shift more of their purchases online. Entire “under-attack” sectors will, like music stores and video stores before them, essentially disappear over the next many years. It’s a slow process. It took 20 years of e-commerce sales to reach this point. And in a way, this is just the beginning. Every year, the environment for brick-and-mortar retailers and the malls they’re in will get relentlessly tougher, ending in many more bankruptcies and liquidations. Each liquidation makes it easier for the remaining brick-and-mortar competitors, but only briefly. Then the process continues.

Other brick-and-mortar retailers will thrive by building a vibrant online presence, as their brick-and-mortar operations continue to shrivel. Macy’s is an example of that. They’re all trying. They all know that e-commerce has turned into an irreversible disruption of how consumers do business. Those that can get on top of it and those that figure out how to offer services or experiences that consumers cannot get online will thrive. The others will disappear.

And the impact on jobs is starting to show up too. Here’s where the jobs went and where they came from. Read…  Jobs, Sliced and Diced

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  90 comments for “Brick & Mortar Meltdown Pummels These Stores the Most

  1. Suzie Alcatrez says:

    JCP just released terrible results for Q1.

    • jeremy says:

      but Macy’s, supposedly, has done much better.

      • Wolf Richter says:

        Macy’s total sales rose 3.6%. Online sales surged 12%. It doesn’t disclose dollar sales online v. brick-and-mortar, but you can figure it out: It closed dozens of stores, including 2 of the 3 in San Francisco. And yet same-store sales rose only 1.7%? They should have surged if all the sales from the closed stores had migrated to the still-open stores. But no.

        What in fact happened at Macy’s: online sales are very strong, and brick-and-mortar sales continue to shrivel relentlessly.

        But wisely, Macy’s doesn’t disclose the actual numbers on this online-v-store split. The clueless just-graduated reporters at the financial media copy-and-paste the propaganda from the company and analysts that are touting the shares. They rarely read the actual disclosures filed with the SEC.

        These reporters even got fooled by Macy’s disclosure of same-store sales (“comparable sales”). They reported 3.9% increase. But here is what Macy’s said in its SEC filing of its earnings:

        “The company estimates that comparable sales in the first quarter of 2018 benefited approximately 250 basis points [2.5 percentage points] from the shift of Friends and Family from the second quarter to the first. Excluding this, the company estimates that comparable sales were up 1.7 percent on an owned plus licensed basis.”

        So same-store sales rose just 1.7%, per Macy’s, not 3.9% per media reports. None of these reporters bothered to read the actual earnings report, or they did read it but their media outlet is making money off Macy’s ads, and they weren’t allowed to print it? Here is the actual report:

        • Petunia says:

          The Macys near me is supposedly turning the store into both a prime retailer and a discounter, by turning over space to their discount chain. It will be like having a Nordstrom and Nordstrom Rack in one store. Now I can just wait for them to move the full priced merchandise to the discount area and I don’t have to drive to another store.

        • Tom Kauser says:

          Online sales from walmart made coffee come out the flume!

  2. mick says:

    Amazon holds 4-5% of retail market share. And it’s not like they got there overnight, so suddenly their market share is causing this meltdown? 3% was ok, but now at 4-5% is the end of brick and mortar.

    Or, the economy is falling apart.

    • Frederick says:

      How good can retail be with 95 million working age adults unemployed and 5 million or so employed part time ? I’m just surprised it’s held up so well considering

    • Derek says:

      I have also wondered this. Who is buying anything? I have a good job and I’m certainly not. There are many, many people living under the freeway bridges near me, and SoDo is full of campers and RVs on side-streets.

      Who can afford $300-500 or more for a phone? It doesn’t add up.

      • Tom Kauser says:

        The new bridge work is designed to prevent homeless occupation and we got that going for us!

    • Wolf Richter says:


      If you read the whole article, you will see that total retail sales are growing at a good rate (5.3%), so the economy is NOT falling apart.

      The article analyzes which retail sectors are under attack from online, and which are not – and to what extent. This is a crucial distinction.

      Amazon is the biggest player, but it’s NOT the only game in town. EVERY brick-and-mortar retailer has online sales, and some have very vibrant and successful sites. I make it a point to always try to buy my stuff at other companies’ online sites, unless I can’t get it there for the same or better price than at Amazon. It works much of the time.

      • Mike R. says:

        Some portion of that 5.3% “growth” is inflation.

        • Wolf Richter says:

          Most definitely. To quote from my article :-]

          “And sales at the “under-attack” sectors edged up only 2.1% in Q4, below the rate of inflation as measured by CPI, even as e-commerce sales surged 16.4%. ”

          The problem with trying to apply an overall inflation rate to a category of stores/merchandise is that the specific inflation rate for that category (say, clothing) may be very different.

          Electronics retailers have for many years struggled with electronics getting cheaper. The first computer I bought in 1985 was a boat anchor, and together with a daisy-wheel printer, it cost $4,000 (in 1985 dollars)! Its tough to grow revenues when your merchandise drops in price.

      • Tom Kauser says:

        Walmart dumped a decade of earnings into e,-commerce and i bet would love a do over? Its fractured between convenient and something to do? Everyday has stabilized, its the holiday sales that really get burnt? Until you can get Ramen and gatorade delivered down the ethernet brick and mortar has a niche?

    • Rates says:

      The story of the economy falling apart is false in the first place. It falls apart only when the Fed’s money is no longer accepted anywhere.

      • alex in san jose AKA digital Detroit says:

        Essentially we’re becoming Brazil. Brazil is cited by “green” advocates all the time, about how they run their cars on locally grown sugarcane ethanol, etc yadda yadda. What they neglect to mention is that maybe 10% of Brazilians can own a car and live a first-world lifestyle, and the other 90% are out there working in the sugar cane fields.

        I’m amazed myself how dependent the “Silicon Valley” economy is on me and my bicycle, hauling electronic surplus items we’ve sold on Ebay to the USPS and FedEx. The bike trailer is also very handy for gathering boxes, bubble wrap, etc to keep our shipping costs down.

        The “muppets” out there who are keeping the economy going as well as it is, are doing things like water treatment, CalTrans, the school system, etc. Unromantic, un-glamorous, slow-moving fields where they have to pay people a living wage to keep the water and lights on and the kids in school, and where then you reach age 40, instead of being turfed out as “too old” you’re given a bonus to stay on the job.

  3. alicat says:

    Adapt/convert malls to housing – studios, apartments, communal living spaces – keep some retail area for cafes, medical, dental, gyms, child care agencies, specialty stores (bike, green grocers).

    • peter says:

      I have thought the exact same thing alicat. Prime real estate where you could put in accommodation, start up businesses or turn them into little community type villages. And all under one roof, so no getting wet to get a coffee!
      Seems a shame to leave them empty and not being used. As usual, someone has to think outside the square to really turn the demise of mall round.

      • chris Hauser says:

        sarcasm is funny.

        last stand in the mall, a ha ha ha.

        but, more on point, if i can go online to buy certain things, i do.

    • Wolf Richter says:


      Malls are difficult to convert. Most of them are older. There are no windows. The structure tends to be tilt-up concrete. It takes a lot of money to try to repurpose them. But efforts are underway, some of them successful.

      Malls have large parking lots, and those malls that are in good locations for housing, can be bulldozed and redeveloped into large housing or mixed-use projects. This too is happening. But the current owner will just get the price of the land (unless there was a gas station on it, then it might be less than the value of the land). The mall buildings are of no value.

      • Umang says:

        Why would you have to bulldoze to create apartments inside malls? You can just convert a vacant anchor store. A mall with apartments that cater to seniors, a grocery story, drugstore, doctors offices, restaurants and a gym would be very successful. No place like that currently exists where you can get to all of those things within steps from your apartment and you don’t have to worry about weather or crime. That arrangement would be appealing to many seniors looking to downsize and simplify.

        • Wolf Richter says:

          Go look at a typical mall building. Bare tilt-up concrete walls without windows specifically built for malls. There’s plumbing in just one tiny corner. You can put a factory or restaurants or a fitness place in it, or maybe a prison, but no housing. Housing needs to have windows and plumbing in each housing unit. There are all kinds of codes that apply to housing. Just because people are old doesn’t meant you can stuff them into a windowless concrete box until they die :-]

          The bare walls of an old mall aren’t worth much.

          Also mall parking lots are huge. So if you want housing, just redevelop the entire property to where it has value decades down the road.

        • chris Hauser says:

          more sarcasm is funny.

          or, sincere?

          hard to tell……

      • Mike R. says:

        They need to convert them to prisons.

    • Kasadour says:

      Storage units for humans.

    • Mike B says:

      Unfortunately that really isn’t an option for many malls and for the same reasons that it doesn’t work for ‘big box’ developments. I’m an architect who works in adaptive re-use and multi family / commercial development so I have looked at this problem in great detail but here is the bullet point summary.

      the necessary utility infrastructure isn’t there (other than major road access)
      the structure isn’t easily adaptable to the needs of housing (few exterior windows)
      the foundations cant accommodate the additional loading to build upwards.

      Retail malls are a dead end development type. the only value is the land that it sits on.

      • Derek says:

        So much for the “malling of America”. Though the “malling” wasn’t just the malls, but more or less everything.

      • OSP says:

        Mike B:

        Couldn’t concrete saws be used to cut walls for windows and floors for plumbing?

        Serious question.

        • Wolf Richter says:


          Yes you can. We did that. But we only cut a few windows into a warehouse building where we wanted to add office space. It’s expensive to do, if you have to do it all around the entire building. Also if you cut a lot of windows, it creates structural problems. So there are limits. In addition, only the housing units at the exterior walls would get those windows, if any. The housing units in the middle, don’t have anything. These malls are huge inside. And the majority of the units would not have windows.

          To add plumbing all around the building to each housing unit is very expensive too (you’ve got to cut through the floor, etc for each one).

          Tilt-up concrete walls are not a huge investment. If after 30 years, if the mall is no longer relevant, and you want to turn it into housing, it’s just better to bulldoze it, include the parking lot in the plans (which is likely the largest portion of the property), build proper housing units, go up 5 floors or more, and create something of value.

  4. raxadian says:

    Hence why storehouses value are going up the roof. You may sell these stuff online but you still need a place to store them until you do.

    Can shoes bought online be returned or not?

    • Frederick says:

      Only if they can pass the “sniff test”

      • James Mitchell says:

        Speaking of. I just spent fifty bucks on underwear at JCP in Norman OK on sale! I urge all of you to pursue this virtuous feeling. Let’s save JCP!

        • Javert Chip says:

          I live in Florida; driving to Oklahoma to buy underwear is out of the question, as is going to JCP for any reason

        • JessyS. says:

          And why in the world would you spend that money on underwear? There are many low cost alternatives not online.

    • Ricardo says:

      These shoes were made for walking and that’s just what they’ll do. One of these days these shoes will walk ….. right- back- to -you.
      Adapted from “These Boots Were Made for Walking”

  5. OutLookingIn says:

    There is one sector that is just not doing great, but expanding.
    Thrift stores, community second hand outlets, dollar stores, refurbished appliance and furnishing dealers, flea markets, parking lot/roadside veggie stands, etc.
    These cash based entities will never disappear and is why cash itself will never vanish. It will always be present, in one form or another.
    E-commerce or digital based shopping, will never replace this type of trade. It may augment as a service, but never replace.

    • Petunia says:

      I hate to break it to you, but the poor on govt aid get it on a debit card. The recipients spend digital money at the thrift stores. There is also a lot of brand new merchandise in the thrift stores now. I think due to all the retail bankruptcies. I just got brand new dish rags and socks at Goodwill.

      • alex in san jose AKA digital Detroit says:

        I just bought a pair of new-old-stock pillow cases at Goodwill. I just “discovered” this Willie’s, it’s on the way to Guitar Center.

        I got a bitchin’ 1960s Sears camera tripod there for $10, but for clothes, I can do better at Marshall’s.

        • polecat says:

          Just last weekend, while perusing the local Goodwill, I found a small entertainment center (solid oak w/ some veneer ply .. No Plastic !). No scratches or dents .. all it needed was to be dusted off, new casters, and the backing replaced w/ plywood. Total cost: $5.00 for the center, $8.00 for the casters (4), maybe $10.00 for the ply. That same item in, say, Restore, would probably go for $60.00-$70.00 easy ! So now I have a place to put the Sony stereo receiver/record player (remember those ??) .. that I bought at an estate sale the weeken prior .. all it needed was a good detailing .. works like it was brand new .. $35.00 quatloos !
          I guess my point is if one knows what to look for, things can be had, and repurposed, rather cheaply … totally bypassing the prime retail gatekeepers, as it were .. both brick-n-mortar, AND online venues .. while helping to keep perfectly good stuff out of the waste stream.
          Apologies Wolf for the ‘second-hand’ segue .. ‘:]

      • HowNow says:

        Polecat, Petunia and Alex, I hope you recognize that this second-hand shopping, which I applaud, represents a decline in living standards. The middle class and their retail enablers trained us to be “throw-away” consumers. But, in an effort to beat the system, we’re now rummaging and buying in the “used” and black markets, when we find them. Good environmentally, but bad economically.

        • Petunia says:

          I do see all this repurposing as a general decline in living standards. But the reality is that when we were broke this outlet was a big help. I both donate and shop the stores. They are also employers of people who are considered unemployable in the regular job market, due to prison backgrounds or disability.

          You would be surprised at the number of middle class shoppers with really nice cars you see at these places. Many strapped consumers have no choice but to shop there.

        • wkevinw says:

          I wouldn’t say I shop at Goodwill, etc., regularly, but I bet I go in them ~ once per month. I’m not poor. There are some vintage things in there that are really great sometimes. I have also bought some “sports team” clothes in there- sweatshirts and t-shirts that were virtually new.

        • Lee says:

          Supposedly there is a thrift shop down in the tony Brighton area of Melbourne (Houses go for multiple millions there) that often have really cheap brand new designer clothes still in the bags and with price tags attached. One of these days I am going to check it out – if and when I ever find myself in the area – it is a 60 klick drive from where I live.

          The story is that they get donations from stores that would rather give away the stuff than mark them down.

          I have noticed that the so called ‘big sales’ here rarely have good bargains like they used to years ago.

          R L Polo sweaters, pants, and shirts used to be 50 – 90% off in one famous department store, but no more.

          High priced items, but they seem to be the only ones that really last. Some ‘brands’ here are so bad you wash them a couple of times and that’s it.

          Another ‘famous’ Australian brand used to be made here in Oz and the quality was pretty good. They had some financial trouble and to save costs, you guessed it, moved production to China.

          The products are now basically crap – socks that sag and are much thinner and T-shirts that are so thin they wear and look like crap.

          I’ll buy my stuff in/from Japan – better quality and cheaper too and made in Japan.

          And speaking of Japan there are now a number of national chains that rent designer handbags and others that buy and sell those things.

          Just one example – no knowledge of the shop – just picked at random:

          (Just a note on those type of bags – Years ago when we first moved to Melbourne the wife needed to get her LV handbag repaired as a result of damage to the lining. We took it to the LV store, but they wouldn’t repair it unless we could prove that it was ‘real’!!!

          Luckily we still had the receipt from when we bought it in Japan………….)

  6. Umang says:

    Why are you excluding restaurants and bars from retail sales calculations? That’s probably the biggest growth driver for retail landlords.

    Also, why are you excluding online sales for Macys? Omnichannel is the future and Macys is way ahead of Amazon in omnichannel.

    • Wolf Richter says:

      Restaurant and bars are a distinct category. They sell a service in addition to goods and don’t fit neatly into the mix of retailers that sell goods. Hair saloons and the like are also excluded because they sell a service.

      Hence I used the category called, “retail sales excluding food services & drinking places.” It’s very standard.

      Concerning your second question: Macy’s online sales are included. What are you talking about? ALL online sales by ALL retailers are included in e-commerce sales.

      • BirdBrain says:

        hair saloon…a great place to get a buzz!

        • alex in san jose AKA digital Detroit says:

          Some “bro” barbershops here include shots of whiskey as part of the service.

          If I could afford barber college, I’d have a hell of a shop. WWII memorabilia on the walls, 1960s hot-rod stuff too, the place’d smell like a combination of Old Spice and just a hint of motor oil, there’d be kool music, and yeah, shots of whiskey. I’d be able to charge $50 a cut (places downtown do).

        • Wolf Richter says:


          OK, that’s what I had in mind :-]

      • BirdBrain says:

        I was hoping you’d get a laugh out of that. You have stellar English skills for a non-native speaker, so I knew you’d catch on quickly to the double entendre(?)/pun.

        • Lee says:

          Get a wife, have her cut your hair – save big bucks.

          Last decent professional haircut I had was in London in 1980……..

          Wife does a better job than all the so called “barbers” I’ve been to. They are a waste of time and money.

    • Wolf Richter says:

      Oh, and how many restaurants does America need? Retail sales at “Food services & drinking places” rose only 3.8% year-over-year. That’s slower than retail sales without them (5.3%). So no, turning aging malls into massive clusters of chain restaurants isn’t going to change the equation. Some landlords are trying because they’re desperate and they need to try to do something. But restaurants are tough. And when the restaurant fails, as many do, the landlord gets to start all over again, if that space can even be filled. There are already lots of vacant mall restaurant spaces. This isn’t new.

      • Umang says:

        Yes, services are a distinct category. That’s the category that is growing as people consume less physical goods and spend more money on experiences.

        “Oh, and how many restaurants does America need? ”

        Potentially lots more. Personal consumption isn’t going down. It’s just shifting from goods to services.

        Regarding Macy’s, I was referring to this comment

        “Macy’s total sales rose 3.6%. Online sales surged 12%. It doesn’t disclose dollar sales online v. brick-and-mortar, but you can figure it out: It closed dozens of stores, including 2 of the 3 in San Francisco. And yet same-store sales rose only 1.7%? They should have surged if all the sales from the closed stores had migrated to the still-open stores. But no.

        What in fact happened at Macy’s: online sales are very strong, and brick-and-mortar sales continue to shrivel relentlessly.

        But wisely, Macy’s doesn’t disclose the actual numbers on this online-v-store split.”

        Why does it matter to Macy’s shareholders whether their sales come from online or in-store? Of course the mix is changing as omnichannel is the future and Macy’s is one of the leaders of that future.

        I think there are two separate things going on here. For retail landlords, their tenant mix is shifting from goods selling tenants to services selling tenants. That keeps them insulated from the Amazon effect. For goods selling retailers like Macy’s, their sales mix is changing so that more comes from online sales. This shows they are successfully adapting and well positioned for the omnichannel future.

        • Javert Chip says:


          You state “Omnichannel is the future and Macys is way ahead of Amazon in omnichannel” and “omnichannel is the future and Macy’s is one of the leaders of that future”.

          o However Macys total sales declined from $27.9B (2013) to $24.8B (2017) with only 1 year-over-year increase in that 5-year period.

          o Amazon 2017 sales are roughly 6 times Macys sales, with Amazon showing massive year-over-year growth.

          You should probably keep your day job and not try to pick the winner between Macys & Amazon. That train done left the station.

      • Lion says:

        Well with Gas prices going way up, we’re not eating out as much. Thinking restaurant profits are going to get tougher to come by.

      • polecat says:

        How ’bout bulldozing some of these out-dated mallz, and turn the land into rentable community garden spaces where people can grow at least some of their own foodstuffs … seems like an awful waste of space to build even MOAR over-saturated retail .. and who knows, it could even be the beginning of a positive trend ..

        • Wolf Richter says:

          That may be a good solution in some places.

        • sierra7 says:

          Right on partner!! It just breaks my farmer’s heart to see over the decades the asphalting/paving over so much of some of the world’s most productive soil in “greater” Silicon Valley……now that malls are going belly up it is time to strip off that vile crust of paving and rehabilitate what is productive to society, not destructive. When will we ever learn??

      • JohnnySacks says:

        Near my place of work a commercial construction frenzy is taking place, a committee designed biotech disneyland, and on the ground floor of every one is a new trendy restaurant opening up where you can get $18 artisanal lunchtime sandwiches, $15 bowls of pho, etc. Appears to be a 2 year revolving door on these inevitable failures, I can’t imagine what the rents must be. Luckily there’s a more slowly gentrifying area nearby where I can get old school service in a linoleum tiled shop with lunchroom chairs and tables run by a Romanian family who recognize me.

  7. Gershon says:

    Everything is Awesome – Buy Moar Stawks!

  8. Arnold Ziffel says:

    Manufacturers and retail chains are getting very competitive on pricing. I now price shop instead of blindly clicking and buying from Amazon. For example; Levi’s sold a 511 jean for $40 and free shipping versus $69 from either Macy’s or Amazon.

    • Javert Chip says:

      Arnold Ziffel

      So I go out to Amazon & Levi’s to verify your high-price claim. It’s false. Gosh, I’m shocked.

      Amazon 511’s start at $21 (some specialty jeans go to $69). Levi’s also has $69 jeans.

      Both sites have almost 100 511 jeans, making apples-to-apples comparisons difficult.

      • Arnold Ziffel says:

        Chip I bought the jeans 6 months ago. Prices change over time.

      • Lion says:

        I very rarely find Amazon as the low cost source, anymore. And when you consider the cost of returns, Amazon, for our family is no longer competitive for most common items. I do find that Amazon is a good source for difficult to find items. Example, our Refrig. water filter, Amazon is the low cost source on that one.

        • mikey says:

 has much lower prices then amazon for common household items and delivers as quickly. But for anything unusual, I go to Amazon. It is too time consuming to keep track of a bunch of accounts and credit cards by buying things other places plus increased risk of identity theft. I do use ebay for unusual stuff amazon doesn’t have. Strangely, Chinese can mail me stuff cheaper then I can mail the same thing to my son 50 miles away.

  9. Debt Free says:

    Good riddance to shopping malls. The only things I will miss are Cinnabon and Orange Julius at the food court. Can’t buy those on the internets.

  10. Lee says:

    RE: restaurants and automobiles

    So how do the stats for those online order and delivery of meals get factored into the data?

    You order online, get the food delivered, and never step inside a restaurant. Here in OZ there are a number of places that don’t even have sit down facilities anymore as all they do is cater for the online market.

    And in NSW, there is on ‘online’ used automobile dealer where you can buy your car, get everything taken care of over the net, and again never have to even step inside the dealership showroom or lot. In fact they don’t even have one. Probably more of that coming to Australia and the USA as well. So I don’t think that the sector will be immune from online sales destruction.

    RE agents are also going to be coming under attack from the online type RE brokers as well. Given the huge discounts from full service places there is no way that the sector is going to be spared. (Don’t particularly like RE Agents so good!!)

    And finally, as I have posted before, one hobby that has been decimated by online sales is the stamp business. I don’t think there is one retail stamp dealer in Sydney anymore.

    • HowNow says:

      In the future, who do you imagine will be buying your stamps?

      • Lee says:

        The stamp hobby is made up of a couple of distinct tiers and each have their own characteristics.

        The ‘normal’ hobby is probably doing ok with lots of people still collecting stamps. This tier is made up of , how should I say it to be polite, ‘stuff’ that will never have any real value when it comes time to sell or the price that you’ll get won’t be anything near what you paid for it. I guess people collect for fun and not with the aim of making a profit.

        For example, the local clubs often has bags or lots of stamps that go for a couple of bucks to $10 that that hundreds of stamps to thousands of stamps in them.

        This category also includes people buying Year books or mint stamps from the Post Office in the recent past (last 50 to 60 years) and then putting those things away for years.

        Basically there is no market for that kind of stuff anymore with only a few select items that sell for over face value. At the local club meeting this month some lady brought over a car trunk full of mint Australian stamps that she must have paid at least A$5000 for over the years. Lots of decimal Year Books and mint stamps in stock books that had rust and mildew damage.

        If she sold the mint stamps she’d be lucky to get 30 to 40% of face value for the mint stamps. The used stamps she had were of no value at all.

        The next tier is made up of stuff that over time you’ll probably get your money back and even make a profit IF those areas are still popular or the stamps you have something special about them. A decent dealer told me years ago that this range started out around the $50 area and went up to around $2000 per stamp.

        Now days I’d say that range has moved up to the $250 to $5,000 area…………

        The last tier is made up of the high value money crowd and is more like investment or the art market. These items will always have a market and are basically beyond the reach of normal people. Bill Gross of Pimco is a famous stamp collector who inhabits this tier.

        As with any hobby you have to educate yourself and become an expert. You or a dealer can’t know everything about the market as it is just too vast.

        This is where your knowledge or expertise can make a difference.

        Or you can lucky and see the value of your stamps soar as the area becomes popular as with Chinese stamps. Stuff that was basically worthless has now become worth a fortune.

        (Think North Korea IF the situation ever works out…………..)

        Lastly, there are very few good dealers around with many ripoff artists calling themselves dealers.

        Many of these so called dealers make a fortune by ripping off estates and widows by offering low prices. Yes, they have to make a profit, but they do it by offering $100 for something worth $1000 or more. (Coin dealers are particularly unscrupulous when it comes to this type of action.)

        • Lee says:

          If you want to see what a coin dealer is like, wear old clothes and bring in something that you know the value of and is a common item that can be sold relatively easily.

          For example a gold sovereign – lots of them out there and the price is pretty much known to the second. Standard buy – sell spreads are published on the internet with lots of activity.

          There was a new dealer that opened doors here a while back and I tried that with him for a common gold coin. The guy offered me half of what the current market value down the street was.

          And by the way – he isn’t in business anymore.

          The other thing that you have to watch out for is that many of the places on the internet that offer a marketplace to buy and sell stamps and coins are littered with con men and rip off artists and unfortunately there is little done by the hosts to kick these people off the site.

          If they do get kicked off, they usually find a way to come back with a another name and start the con game all over again.

          Lastly, some dealers will try anything under the sun to rip people off and sometimes it doesn’t matter how much knowledge you have.

    • Norman S. says:

      And, thanks to Artificial Intelligence, we eventually won’t need live ‘service providers’. So only the 0.1% will have any money to buy from those online stores!

  11. BirdBrain says:

    I just read that Wal-Mart’s “digital sales jumped 33% last quarter”. Wow!

    They’re quick and package items very well—UNLIKE AMZN!

    • Keith says:

      That might be coming from Jet’s experience. I can buy hygiene gear from them, nothing leaks or breaks. Amazon, no so much. I also wonder if it has to do with working conditions you hear about. They are in a rush to fulfill that they adapt a good enough for govt work ethic.

      • BirdBrain says:

        I actually do more shopping with their site, but Wal-Mart online has always been just as good as before they acquired Jet. I have 2 packages coming this weekend from Jet—they’re my absolute favorite. Their customer service is stellar—I think they’re in Utah so that’s not surprising. I save a ton of money buying things in bulk with them. Living in a rural area, it’s awesome to get their goods and so quickly.

        • Keith says:

          I love the discounts for bulk buying from them, too. A reason I do like them (and Costco, too). I am also rural-ish, so spending an hour just commuting to town is a big hassle. What I find interesting is that Jet offers bulk purchases whereas Amazon is pushing the just in time consumer model. Interesting to see how it turns out.

          I have noticed some differences with Wal-Mart. That being said, I have only recently using more of their online options, so probably not a good observer on that end.

    • Jim Graham says:

      All of my Wal-Mart online purchases have been shipped to the Wal-Mart store of my choice and I go there and pick them up when I am out and about.

      THAT shipping is always free no matter what it is… And if it is big and / or bulky the staff helps me get it into the truck…

      • Keith says:

        I think that model has/is expanding to all the big box retailers. Lowes and Home Depot offers that service, too, which is nice. But with fuel prices going up, something might have to give.

    • mikey says:

      I think a lot of it is coming from online grocery pickup. I have been using that and it’s great. Much lower prices then if you order from on most things. They bring it right to your car as soon as you arrive.

      • BirdBrain says:

        Would that count as “in-store” (i.e. charged by your local store via the Internet) or “digital”? Their stores’ sales went up by 2.x%.

        “There are now 1,200 stores offering grocery pickup, up from over 900 in 2017, 600 in 2016, and just 100 in 2015. Walmart says it will expand curbside pickup to 1,000 more in 2018.”

        Not quite 1/3 of stores offer grocery pick-up then. I know my local one doesn’t…but that could be kind of convenient…if they don’t let my frozen foods sit and melt…

        • Mikey says:

          My guess is it counts as internet sales because you ordered it on internet. Internet sales give stock price boost. Now, they are paying someone probably ten dollars to pick it out so profits go down. A few things they charge higher prices then in the store so maybe it evens out. The employees are much better then in the store although i have not seen any twice.

  12. Alex says:

    Bon Ton screwed the pouch a long time ago by losing trust with constant “sales”.

  13. ML says:

    Ecommerce is glorified mail order. Before the ‘internet’ – strictly, before transactional websites – most retailers would’ve laughted at suggestion they do mail order. Too much hassle; you have to be geared up for it to be any good, let alone successful. And there’s the rub. Most retailers have had ecommerce imposed upon them; adapt or die. So they have a go but not really being too good it doesn’t really pay. Measured by percentage turnover looks good on trading announcements but customers expect lower prices, so margins are hit. Returns increase. In UK, it is estimated that after Christmas trading, some 50% goods are returned. The cost of ecommerce is nothing like as low as observers might think.

    As for malls, location is the key. So too the calibre of the anchor tenant. Since in most larger malls the anchor store is likely to be a department store, whike in smaller malls a food supermarket, the attraction of the mall depends upon the appeal of the anchor store.

    And another thing, the decline of the profitable customer. A profitable customer is someone who doesn’t care about price, or at least doesn’t put price at the top of the list of priorities. But a decline means that price has risen to the top of the list for most customers so shopping around has become a norm. Which means the retailer is hard pressed to sell at full margin. Full margin is needed to sustain the operating costs for bricks and mortar stores.

    It is a vicious circle and most retailers are stuck in the middle, squeezed on all sides by rising costs and falling margins. There have always been too many shops but it is time now for the wheat to be sorted from the chaff.

  14. mvojy says:

    The Sears that anchored my local mall was liquidated and the plan is to convert the upper part into movie theaters and the ground floor into a superpmarket. The town is likely to rezone the mall property to allow for residential housing units which I believe would be apartments built on top of the mall’s footprint. This helps the town meet its affordable housing requirement without having to allow dense housing in their prized suburbs. It helps the mall by giving it a local customer base that can frequent its theater and supermarket. I would bet that the empty stores in the mall will turn into things like dry cleaner, dentist, nail salon and other things that can’t be done online. Then they will add parking garage for the residents and create a park space for them. The future of malls is stacking apartments above them and repurposing the empty storefronts into things that ecommerce cannot replace.

  15. Arnold says:

    Why can’t malls become warehouses?

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