Tusco Display blog
Tusco Display blog


Retail Works

By Mike Lauber - April 1st, 2017

In a March 18 Wall Street Journal article, Jeff Blackledge, an analyst for Cowen & Co, noted that retail space per citizen varies greatly from one country to another. For instance, the US has 48 sq ft for every man, woman and child. The UK devotes about 22 sq ft and Canada about 13 sq ft for each resident.

Does the US have more bricks and mortar stores than it needs? Sure. And square footage is probably on the decline for the first time in 50 years.

With all the doom and gloom of store closures and the growth of Amazon and online, positive news about stores gets overlooked or downplayed. Dollar General keeps growing – they have 13,320 stores, double the number they had 15 years ago. Aldi’s plans to spend $1.6B to renovate and/or expand 1300 of their older 1600 US stores and swiftly grow to 2000 locations. Aldi’s competitor Lidl comes ashore to open their first 100 stores in the US in 2017; they already have over 10,000 stores across Europe.

Stores at the margin of profitability close as part of the healthy ebb and flow of retail. Do we need Phar-Mor, Hollywood Video or Gold Circle today? No. They lost out to superior competitors. Convenience, cost, expert advice, choosing the exact product after interacting with it and the social aspect of shopping remain in full effect even as some retailers close. Retail still works even if not every retailer does forever.

Expect Amazon to keep growing rapidly but don’t expect Kroger, Home Depot, CVS or Target to dry up and blow away. According to the Pew Research Center, though 79% of Americans shop online, 65% prefer to buy in a physical store. The best retailers will battle successfully, morph to meet the evolving needs of their shoppers and win in the end. Because retail works. To learn more contact us today!