Directory of Major Malls
Directory of Major Malls

Journalistic Gaslighting, Not A Retail Apocalypse

The past decade has been devastating to the American retail industry, as traditional malls and countless stores across the country continue to shutter at record highs. As many as 9,300 stores are expected to close this year alone, while a whopping 1.3 million retail workers have lost jobs during the course of the last 10 years. – Business Insider, December 23, 2019

The above is a typical example of doom and gloom reporting associated with the so-called retail apocalypse, and similar articles filled with hyperbole and half-truths distort public perception of the retail industry. For some perspective, the retail trade sector, as defined by the Bureau of Labor Statistics (BLS), consists of approximately 1 million establishments which facilitated approximately $5.4 trillion in sale transactions during 2019 ($6.2 trillion when restaurants are included). According to the World Bank, the GDP of Japan, the world’s third largest economy, was $5.1 trillion during 2019. Knowing this, if an apocalypse in the retail trade sector was truly knocking at the door, domestic policy makers would be going berserk because it would wreck the U.S. economy. But, they’re not. Because, it’s not. Thankfully, Uncle Sam keeps very close tabs on the retail trade sector due to its economic importance, and one closely tracked, but rarely discussed, metric is the count of retail establishments.

Retail Trade Establishment Counts

Count of Retail Establishments by Subsector
Source: U.S. Bureau of Labor Statistics, Davenport Consulting

As you can see in the chart above, the retail establishment count (aka store count) hasn’t changed much over the past 20 years. Sure, some retail subsectors have struggled while others have thrived, but, from a net change perspective, the total retail trade store count has been incredibly stable. That’s not to say, however, that the occupied stock of retail space has remained the same over this time period. It hasn’t; it has increased. For example, when a Home Depot opens a new location within a new market, locally-owned hardware stores tend to shutter their operation. Oftentimes this results in a net negative change in store count but a net positive gain in occupied retail space. Furthermore, there is a notable omission in the above chart – restaurants (see chart below).

Count of Retail Establishments by Subsector + Restaurants
Source: U.S. Bureau of Labor Statistics, Davenport Consulting

Retail Trade Employment & Sales

Let’s now turn our attention to another claim, “a whopping 1.3 million retail workers have lost jobs during the course of the last 10 years.” For more context the author links this claim to another article she wrote regarding private-equity-owned retailers collapsing, wiping out 1.3 million jobs in the aftermath. She says, “More than 1.3 million retail workers lost their jobs at the hands of private-equity firms over the past decade, according to a report published on Wednesday by the nonprofit organization United for Respect.” Okay, but the thing about retailers and restaurants is that they are closing AND opening locations all of the time. The employees, or in this case prior employees, don’t go down with the ship and remain unemployed forever because the Kmart they used to work for went out of business. In truth, like the retail establishment data, demand for retail trade employees has been remarkably stable over the past two decades.

Retail Employment & Job Openings
Source: U.S. Bureau of Labor Statistics, Davenport Consulting

That retail employment and retail establishment data jibe so well shouldn’t come as a surprise. Be that as it may, there is still one argument consistently raised which strikes at the heart of brick-and-mortar retail: e-commerce (aka e-tailing, online shopping, showrooming, etc.) will ultimately lead to the demise of traditional retailers. Here’s how the data, backing up this claim, are usually disseminated.

Year over Year percent Change in Brick and Mortar
Source: U.S. Census Bureau, Davenport Consulting

As presented above, non-store retail (i.e. electronic shopping and mail-order houses, vending machine operators, and direct selling establishments) appears to be absolutely dominating brick-and-mortar retail, defined as total retail sales less auto, gas, restaurant, and non-store retail sales, in terms of growth. But, percentages without proper context are misleading and, frankly, useless. In this particular case, brick-and-mortar retail sales far exceed non-store retail sales, which creates a denominator handicap. A more accurate story can be told by examining the absolute dollar change in annual sales as opposed to a percentage change:

Year over Year Dollar Change in Brick and Mortar
Source: U.S. Census Bureau, Davenport Consulting

Between 2010 and 2019 brick-and-mortar retail sales climbed by approximately $625 billion compared to $428 billion for non-store retailers. Is this shocking information? Maybe you’re focusing on 2019 as an indication the e-commerce induced retail apocalypse is now upon us? Well, it’s not. We intentionally omitted 2020 retail sales data because it severely skewed the range of the chart, but the preliminary data are in and year-over-year brick-and-mortar retail sales increased by a whopping $368 billion (14 percent) compared with $268 billion (38 percent) for non-store retailers…in only one year…during a pandemic…when we were all told to stay at home as much as possible and, for a period of time, many brick-and-mortar stores were forced to shutter their stores.


Sears began its life in 1886 as a mail-order catalogue that sold watches, but it soon expanded into a wide variety of consumer products. By 1896 groceries had been added to the catalogue. Its first brick-and-mortar store opened in 1925. The mail-order catalogue portion of the business, which was once known as “the Consumer’s Bible,” was terminated in 1993 due to mailing costs associated with the paper catalogue and merchandise.

The following year, in 1994, Amazon was founded as an online catalogue of books. Like Sears, it soon expanded into a wide array of products such as electronics and clothing. In 2017 Amazon purchased Whole Foods, kicking off its first major foray into groceries and brick-and-mortar retail. Today, Amazon is widely known as “the Everything Store.”

History never repeats itself, but it often rhymes.
The king is dead, long live the king!

During 2020 almost $3 trillion was spent in brick-and-mortar retail stores compared to $970 billion in non-store retail clicks. Who exactly is the 800-pound gorilla in this movie? If online retail is the future, why are so many online retailers pursuing brick-and-mortar locations? The fact is, retailers migrate to wherever they can most effectively sell their products to consumers. In some cases this is accomplished digitally. But, as the retail sales data show us, over 75 percent of retail sales still occur in brick-and-mortar locations. Moreover, sales in brick-and-mortar retail stores continue to grow despite the common refrain of an apocalyptic scenario.

Brick-and-mortar retail is not dying at the hands of e-commerce, or anything else for that matter. This is not conjecture. The data presented in this report are facts, reported by the U.S. government, which is the world’s gold standard when it comes to economic data. Claims of a retail apocalypse cannot be supported against the backdrop of this information. Sure, some retailers have shuttered their brick-and-mortar operations. But, to take idiosyncratic failures and extrapolate them across the entire brick-and-mortar retail ecosystem is disingenuous at best. The key to knowing when someone is gaslighting you is to be armed with facts and supporting data. Now, you can blow out the flame.

Jeff DavenportAbout Jeff Davenport

Jeff Davenport is a data geek who talks in his sleep about commercial real estate. To pay the bills he takes a dash of economic data, a pinch of demographic data, a teaspoon of CRE data, and a splash of common sense to create a large helping of actionable intelligence. He has spent the past two decades in commercial real estate development, leasing/sales, research, and advisory roles. You can connect with him on LinkedIn:

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