Leadership Blues

Now, that the continuing circus on Capitol Hill is over, the two political parties should get back to work on the affairs of the nation. Don't hold your breath waiting. The only lesson that the public can learn from the theatrics is that both parties hate each other so badly that they won't be able to address any problems. This sad outlook will spill over to the national issues which will not be addressed. We already know that the media pays little attention to our national retail crisis. None of the Democratic candidates for the presidency has even given some lip service or any ideas concerning the fate of the retail industry in its historical format. Trump avoids the issue by circumventing it. He keeps the issue out of the news. He stays with what works-higher stock market and full employment. By doing this he also shows that he does not have any ideas on how to fix the problem. Is this the last days of the Thanksgiving Day parade?
Even the simple remedy to even the playing field by adding a sales tax on internet purchases is not on the table? This is the heart of the problem. Consumers know that by buying online that they are immediately ahead by six to nine percent through the sales tax. Many states have enacted a sales tax on internet purchases, but executing the policy has not been fruitful. The fairest idea would be for a national tax that allows each state to receive their respective tax amount. Our nation rarely chooses the fairest policy. If something is not done and soon, brick and mortar stores will be cut in half. Unemployment will rise. In the last five years retail has lost 241,000 jobs. A report by McKinsey estimates that by 2030 due to automation the global community will lose 375 million jobs. This disruptive aspect of capitalism will send our economy, and possibly the global community into a deep recession, if not a depression. Macy's not only will end its glorious parade, but the firm may collapse and disappear?

This is the recent trend...

In 2017 the number of retail stores that closed exploded. The stimulus from 2008 only delayed the trend that started at the millennial. E-commerce in the year 2000 began to peel away into the dominance of brick and mortar stores. It has steadily gained. At present it is 10% of the market. One may think, what is the danger when 90% of consumers still shop actively in a store?
Dear Reader, you must keep in mind that the retail stats are very misleading. They include your quick store stop for gasoline and then, maybe you purchase a snack or something else? They include your grocery shopping to which is also coming under duress. More and more firms are getting into home delivery like Walmart and Amazon. This is killing the standard supermarkets like Safeway. In addition, you have your large discount stores like Costco. You have your national drug firms like CVS and Walgreens that sell many consumer staples. Little by little the revenue of your standard brick and mortar stores is eroded. Did I mention malls? Your anchors like Sears, J. C. Penny and Macy's are closing stores as soon as their lease is expired. This kills the foot traffic in malls which are standing empty throughout the nation. I still cannot get my head around the unemployment reporting because when a store closes the number of lost jobs is a multiplication number. It is not one facility. It is many members making up the total number of lost jobs and wages. For example, Shopko employed 14,000 workers. They closed all their stores. Payless has cut 16,000 jobs.
This is another advantage of online firms. They have one central location. Because they entered the competition recently, they have utilized modern technology like robotics. They have consistently used less and less manpower and more machine service. This point is unquantifiable at present. Together, all these points is sending traditional retail to the big office in the sky.

Core-sight reports that 8,139 stores closed in 2017.
In 2018 the number declined due to Trump's tax cuts to 5,864.
The number for 2019 has already surpassed 12,000. People, that is 12,000 stores multiplied by the number of workers in each store. This is why I cannot believe the unemployment stats the bureau is releasing. Oh, by the way, Macy's started the new year by announcing that it will close another 125 stores and many are located in malls which adds to the contagion. Macy's says that it earned 78% of its sales from just 250 stores. This means the firm will probably close another 250 stores.

It gets worse...

Another report by a UBS analyst says, "If e-commerce total percentage of sales were to rise to 25% (and the trend points this way) by 2025, another 75,000 stores will close their doors.

Meanwhile, the next show in the circus in Washington continues, the beat goes on...