It is very likely that we will continue to see a large number of store closures and bankruptcies though the first half of 2021. The pandemic is still getting worse and we won’t see the net benefits from the vaccine for months. Unemployment is still very high and our economy is still doing poorly, in spite of the booming stock market. As Coresight Research indicated, it appears that several chains hoped to make up for lost revenues during the holidays. Now they have to deal with significantly slower sales in January and February and the potentially negative impact of returns from holiday purchases.

2020 was a very disrupted year. However the disruption is not yet over. Some pressures will continue into 2021 and retailers will also use the year to take stock and assess their store portfolios. Inevitably this means more closures of both stores and underperforming malls. The biggest factor driving this dynamic is that there is too much bad retail space in the U.S. which is simply not productive. The pandemic has hastened its demise and, while painful, this probably isn’t such a bad thing for the long-term health of the retail sector.

We should expect that the pressure will be on and that the store consolidation trends will continue through 2021. COVID-19’s great digital acceleration has not only led to a dramatic increase in e-commerce sales but also accelerated the need to right-size the physical store fleets.

As part of any retail business transformation, the need to free up liquidity for critical capital investments requires any retail operation to take an objective look at the productivity and profitability of each physical location. Although the vaccine is slowly being distributed, we should expect that the disruption will continue this year. The 30 percent to 50 percent physical store traffic shortfalls have been devastating for retailers, as consumers have navigated to digital channels.

The right-sizing activities will also continue even as the stores remain a vital asset for online fulfillment, with same-day delivery, BOPIS, and curbside options. This may necessitate keeping key locations open throughout the pandemic.

The 2020 retailer pressure to close stores will continue into 2021 as long as the pandemic is not under control. Retailers will continue to rationalize the stores they need to keep open vs. those that are under-performing. A retailer will also have to balance their brick vs. click business. There is a huge amount of consumer sentiment to want to get out to shop, eat out and be in public again. The best retailers will be ready, with their best performing stores, to satisfy consumer needs and wants once the pandemic has past.

I think the independent retailers and restaurants that couldn’t make it are pretty much already gone.

As for the larger retailers, yes, I think they’ll close stores as their leases end. But I don’t think there will be more than 2020 — because I don’t see a complete lockdown coming again.

Inert, non-essential retailers will feel relentless pressure to close stores in 2021. Real estate investors need tenants that can consistently pay on time. Their generosity is finite.

Department store anchors are fading away, chains like Gap are fleeing malls and consumers are making e-commerce a more frequent habit. As an accelerant, the pandemic is decluttering stores and rejuvenating retail by rewarding responsive, customer-centric companies — of all sizes.

Happy New Year! Let’s hope the happy part of that rings true. I think there will be more pressure for store closings. More than a handful of retailers continue to look at underperforming stores and struggle to be relevant near-term due to stay-at-home restrictions and work from home realities.

Factors influencing these trends besides COVID-19 are: being too small to hold out, having too much debt to spend on needed updates, being slow to convert to omnichannel, a lack of omnichannel talent and maybe just some bad strategies that were possible to overlook during better times.

Maybe the question should be “Is there any reason store closings won’t continue and even accelerate?”

There are two big factors. The country is over-stored. This has been in play for decades. The other is that the pandemic has: 1. caused many who never thought about online retail to not only try it but adapt to it and discover its convenience, and 2. made even those who were comfortable users of online retail develop it into a habit as the default alternative.

Hopefully the issue isn’t “pressure” at all, but smart and aware retail management that understands the trends and makes real business decisions with future trends in mind. Sadly, historically, retail management has been reactionary, not forward thinking.

It’s important to note that while more than 11,000 stores closed in 2020, about half that number opened. During a pandemic. What’s more, thousands of new stores are already on the books for this year, with Starbucks, 7-Eleven and Dollar General each expected to open more than 800 locations. Aldi has 450 planned openings and Casey’s General Stores expects 150-200 new stores. The list goes on. While these openings don’t totally offset the projected closings, they clearly show resilience in the market. Guess I’m just a glass half full guy…

The pressure to continue rationalizing stores will be unrelenting for the next several months as the pandemic continue to rage on and store traffic continues to suffer. However I hope retailers have the financial wherewithal to separate long-overdue rationalization from crisis-induced closures, as I expect a huge bounceback in the second half of the year, assuming the vaccine rollout goes reasonably well. I suspect that even beleaguered malls will be part of the recovery, at least for the second half of the year, and hope that performing stores can hang on until then!

The challenges that retailers faced in 2020 are not over yet. The vaccine will eventually offer some relief but it might be too late for some of the non-essential retailers who are already struggling to pivot and stay relevant.

The stores that were on the brink of going out of business, but survived, may be able to hold on for a few more months. Often these are boutiques or smaller local chains. Those that were struggling prior to COVID-19 that couldn’t adapt will go out of business. Some of the larger chains that were barely holding on prior to COVID-19 will find an opportunity to file Chapter 11 to reorganize and get out of leases in locations that aren’t working. No doubt this time next year things will look different.

There’s no joy in Mudville. With increased online shopping persisting and pressures on income and pretty much everything else due to COVID-19, I don’t see stabilization until Q4.

As long as the pandemic continues and until the majority of people receive vaccinations, yes, it’s very likely we will see more store closings. Will it be more than in 2020? That depends on the timing of vaccines and the timing of all those people still unemployed from 2020 finding new jobs. The distribution of stores across the country was not evenly spread and the density of certain brands in some regions was simply too much (looking at you Macy’s and other department stores!)

The pressure will be felt more by smaller retailers than it will be by larger brands. Large retailers will close some stores as leases expire, but smaller retailers, especially independents, simply don’t have the cushion needed to withstand month after month of losses as the big brands do. These stores will be lost forever, and we’ll have to hope that emerging DTC brands start opening stores again post-pandemic to bring back our retail High Streets!

Sadly, the pandemic is not behind us. The new and more contagious strain that’s circulating may mean we will find cases spiking again as they are the UK. 2020 brought down a number of storied names, but honestly many were struggling before the pandemic and the disruption accelerated the inevitable. My fear is that in 2021, as this drags on, we’ll start to see more closings from companies that had reserves and were able to weather the storm, but are now running out of resources. I see the impact coming to mid-tier retail especially.

We’re far from done yet. Prior to COVID it was clear that years of overbuilding and the failure of unremarkable retailers to fix their out-of-date business models was creating a growing mismatch between physical store capacity and consumer demand. The overdue reckoning that began in 2017 has clearly been hastened by the pandemic and it’s a mistake to blame this largely on the growth of e-commerce. The COVID crisis has obviously favored online shopping (though much of this incremental growth is actually supported by physical stores) and a shift of traffic to “essential retailers.” The underlying drivers of this will not change materially until wide spread vaccinations. The two by two matrix is easy to grasp. Essential and Remarkable: few if any store closings (in fact, probably store openings, see Tractor Supply and many others). Non-Essential and Unremarkable (see J.C. Penney, et al): store closings galore.

Once again we have a spirited conversation about “retailers” that could be clarified greatly by considering “which retailers.”

Yes, the nation is chronically “over-stored” but we need to understand the continuing contraction of retail space by sector and format. Several comments here show an understanding of this reality.

QSRs and dollar stores are having a decent time of it. Supermarkets and Walmart have enjoyed a revenue boom. Home centers are banking cash. Specialty apparel and department stores are up against the wall, with numerous bankruptcies. Independent restaurants, coffee shops and taverns are being crushed. Enclosed malls have more dust bunnies than human visitors. In many categories, ecommerce players are filling the gaps.

This may well add up to a greater number of retail closures in 2021 than in the grim year just ended, but the damage will continue to be unevenly distributed.