According to a report from Coresight, a research firm that tracks retail trends, many retailers will be hit hard by an extended period of lower-than-normal demand for discretionary items and the increasing share of consumers who prefer to shop online.
In a report released Tuesday, Coresight said more than 4,000 stores have said they intend to permanently close in 2020. The firm said it expects closures to amount to more than that, ultimately snowballing to a number topping last year’s record of 9,302.
"Apparel retail and department stores look set to feature prominently in total store closures," Coresight said in its report.
Retailers that were struggling to stay afloat before the coronavirus pandemic and recession are “unlikely to have the wherewithal to stay the course on the road to recovery,” the firm said.
Retailers file for bankruptcy
In the past few months, Pier 1 Imports, JCPenney, and Tuesday Morning have all filed for bankruptcy and announced plans to shutter hundreds of stores. Coresight said more than half of expected store closures will be in indoor shopping malls, which have faced stiff competition from Amazon and other online retailers in recent years.
The loss of a large “anchor store” could create "a ripple effect that spells bad news for malls," Coresight said.
Recent research shows a majority of consumers are still hesitant to reenter brick-and-mortar stores for purposes other than essential shopping. Sixty-one percent of consumers said they are holding off visiting physical stores, according to research firm Ipsos.