While the pandemic has made it impossible for some retailers to stay in business, a new report suggests tens of thousands of retailers could disappear in the coming years.
The problem, according to investment bank UBS, is too much space and not enough customers. As a result, the bank projects 80,000 fewer retail stores by 2026.
On a sunny afternoon in Rice Village, where people typically come to shop or eat, traffic is still slow, thanks to the pandemic and other shopping options.
"I'm not surprised," says Emma as she strolled among the stores. "I feel like the retail industry was kind of struggling and moving online, anyway."
That's part of the equation for the UBS report. As online business continues to grow, there is just too much retail floor space to sustain potential shoppers.
The year started with 115,000 shopping centers across the county, including strip centers, malls, and outlet locations. The pandemic has not been their only challenge.
"The reality is that a lot of the retailers that we saw close, through COVID, most of those were already in trouble," says Houston commercial real estate broker Jason Baker.
The UBS report notes that store openings have outpaced closings, so far this year. That's, in part, thanks to government stimulus programs that will not be able to keep doors open indefinitely.
Instead, individual locations and once-popular shopping malls may struggle to find anyone willing to come spend their money.
"The strong regional malls, I think, will continue to get stronger," says Baker, "I think we'll continue to see older malls, ones that are less well positioned, be repurposed. We're seeing that all across the country, not just in Houston."
So what stays, and what goes? The report forecasts clothing, office supplies, and sporting goods retailers to be among the hardest hit. Grocery, home improvement and discount retailers are projected to weather the cuts.