What is the Ultimate Impact of the Changes in Shopping Habits?

Every week, a new announcement is made by a chain store that it is closing locations.  Last week, Pizza Hut announced it is closing 500 locations to focus on “growing its carryout and delivery service.” (https://www.today.com/food/pizza-hut-closing-hundreds-its-dine-restaurants-t160225)

Many mall based retailers have shut down completely as online sales continue to grow.  Since the 1950s, shopping has become almost a sport in the US.  We went from shopping at large downtown department stores to suburban strip malls to suburban malls.  It seemed like retail development would never end.  And then the internet arrived.

Currently, the US has significantly more retail space per person than any country in the world.  The US has 23.5 square feet of retail per person.  Canada is second with 16.8 SF per person.  Australia is third with 11.2 SF per person.  No other country in the world has more than 4.6 SF per person of retail space!  The US has over 5 times the retail space per person than the UK does! 

(Source:  https://www.businessinsider.com/retail-apocalypse-is-still-in-early-innings-cowen-says-2018-10)

One reason for the big difference in retail square feet per person between the US and other countries is our population is more spread out.  But our big cities are growing faster than our rural areas.  Retailers will close rural locations as more people move to large cities.  People living in rural areas will have to order more online or drive farther to find what they want.  That will push more people to move closer to urban areas, exacerbating the trend of retailers closing rural locations.  That will leave a lot of vacant space throughout the country.  Some will be repurposed as fulfillment centers for online retailers, as has been happening.  Some will be redeveloped into more interactive spaces.  Some will be torn down. 

The biggest impact the changing retail landscape will have is on the workforce.  Customer facing jobs are going away, replaced by automation and people sorting packages.  It is already challenging to find people capable of interacting with another person in a professional way.  That is only going to get worse. 

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