The concerned authorities have stated the fact that more than 50% of the department stores will be closed by the end of 2021 in the region of the United States. Many people in the region are buying more and more products through e-commerce websites. Around 1000 malls in the US alone will no longer be supported by the people. It was also reported earlier that 27 retailers have filed for bankruptcy in the year 2020 due to the coronavirus pandemic. Many big names were included in the list. However, some of the retailers found new funding and new ownership. Although, the retailing stores which were unable to find the buyers were forced to shut down.
It is also estimated 20000 to 25000 physical retailing stores in the US will be seen closing in the year 2020. Around 50% of these stores are located in big malls. However, it is also stated that before the coronavirus pandemic many of the retailers were still struggling to make a profit because people were shifting towards the e-commerce platforms for their shopping. The retailers are also struggling to pay the rents and that’s why they have changed their business models. The basic business model of all of the retailers now is to just survive in the market and make a minimum profit so that they can have basic necessities of life.
Co-Tenancy was also introduced for all of the retailers so that they can pay low rents. Also, many of the retail analysts are still doubtful of the mall warehouse space to be coexisting with retail use. They are saying that the shoppers will not be liking to pass an industrial space just to enter the luxury retail store. It is also said that the mall operators will not be able to handle the situation such as the real estate experts. Restaurants are also seen adding more services rather than just serving food.
