There’s nothing wrong with the retail landscape in the U.S., analysts say.
“Retail is doing just fine,” said Michael Klein, Adobe’s director of industry strategy for retail.
“What we’re seeing is an increasing difference between the winning and losing retailers,” he said, noting that the retailers which focus only on product and pricing will perish.
“The American consumer has never been healthier,” said Jan Rogers Kniffen, chief executive of New York-based J Rogers Kniffen Worldwide, citing record low unemployment, rising wages and historically strong consumer confidence.
But Kniffen, a longtime department store veteran, explained that retail store closures were a result of several factors.
Traditional brick-and-mortar businesses have been fighting for “the anemic growth” in physical store sales, but retailers that have invested heavily in online and in-store sales have seen much better sales, he said.
He singled out companies like Walmart and Target, where online sales have accelerated at about 40 percent annually recently.
He also noted that there were two big differences between U.S. retailers which have gone broke and those which have won growing market share: taxes and debt.
Companies enjoyed a tax reduction after corporate taxeswere cut from 35 percent to 21 percent – but Kniffen highlighted that only companies which were profitable were able to use this tax saving to invest in their businesses. Those which were not profitable “saw no benefit from the tax cut.”
Those that went broke, he added, “were carrying high levels of debt and could not afford to reinvest enough back into their businesses to be winners either online or in-store.”
