It looks like we can finally have a serious conversation about the impending collapse of physical retail in the U.S. All it took was a 160-year old retailer and a $34 billion kick in the stomach to the retail sector to get everyone’s attention.
News last week that Macy’s profits would take an unexpected Q4 nosedive set off a retail stock market shock wave that wiped $34 billion in value from the sector. But it wasn’t just Macy’s that got out over their skis about the prospect of a blowout holiday sales season with an employed, confident consumer ready to spend. Kohl’s and JCPenney, along with other specialty retailers, reported the same lackluster holiday performance in what is still considered the sector’s make-or-break quarter.
Of course, last week was also the long-anticipated swan song for the nation’s second oldest U.S. retailer, Sears, which found itself standing at Chapter 7’s front door.
Analysts who think of Macy’s as the bellwether for middle-America shopping and spending trends blamed some of the retailer’s gloom and doom on consumer skittishness over the stock market’s roller-coaster ride in the weeks preceding Christmas. A fire at Macy’s distribution centers, they said, also hurt inventory availability.
Although both could be contributing factors, that isn’t what ails Macy’s – or any of the traditional physical retailers who have spent years now trying to convince the world that it, as a retail channel, isn’t dead.
