A few weeks ago, I asked the question “Is It High Noon in the Retail Industry?” Profits are shaky; stores are closing. Some of the biggest names in the history of US retailing are struggling to stay alive. Well, the news isn’t getting any better, at least for department stores. They continue to be center stage in the negative retail industry news trend. Most of us are well aware of the steep uphill battle JCPenney and Sears are experiencing. Just last week, Macy’s, the largest traditional department store chain in the United States, one that had enjoyed relative success for most of the last decade, announced dismal earnings: its ninth quarterly decline in a row. Macy’s had cut its latest earning projection in half and then missed that target. Those results seemed to have caused a broad decline in retail stocks, even including Amazon.
Does the depressing retail industry news surrounding Macy’s, JCPenney and Sears mean retail brick-and-mortar stores will become a thing of the past? It’s true that the effect of Amazon and e-commerce has severely impacted traditional retail. Stores are closing right and left. Add on to that the reported loss of 50,000 retail jobs in the last three months. Not good news for sure. But thankfully, retail industry news around department stores is not the overall industry barometer it once was.
Traditional department store volume is still a minuscule percentage of the $5 trillion-dollar retail sales volume in the United States. According to Census Bureau data, retail is still growing as a whole. It’s just changing now more than ever before. A comparison of the sales volume of the top 20 US retailers in 1995 versus 2015 tells an interesting story. The only true consistency is that Walmart was number one in 1995 and remained there in 2015. Kmart and Sears held the number two and three positions in 1995. Now combined under the Sears banner, they placed a distant nineteenth in 2015. Target slipped from fourth to sixth. Costco rose to third, Home Depot went from eighth to fourth, and Walgreens jumped from thirteenth to number five. CVS wasn’t even on the list in 1995 and placed seventh overall in 2015. Amazon was absent from the list in 1995 and ranked eighth in 2015. Another missing player in 1995 was Apple, who came in at twelfth overall in 2015. Going the other way, JCPenney ranked sixth in 1995 but didn’t make the top 20 in 2015. Overall, drug, grocery and e-commerce categories were some of the biggest gainers on the list, where department store certainly suffered the most.
Yes, the retail industry news is sobering. The changes are negatively affecting many workers and investors. But, overall, it’s still growing. No matter what retail looks like going forward, it will always need loss prevention professionals in one form or another. So, stay sharp, be aware of how the industry is shifting, and make it a point to acquire skills around future trends, not past successes.