More retail closures in 2023

by Zain Jaffer

News reports and videos about young people going into stores and shoplifting en masse in the big cities has now become commonplace. It seems that pandemonium is starting to take over as police departments have been defunded in those areas.

Sadly this worsens the downturn experienced by commercial real estate. As crime rates increase in downtown city areas, more retail stores close down. Margins have been thin anyway. Because a lot of retailers rely on office workers who buy their goods, the recent trend of work from home and quiet quitting has reduced their sales. Office real estate is experiencing high vacancy rates at the moment.

A recent May 2023 news article in Business Insider reported that more than 2,100 stores are slated to close in the US this year. [1] These include big names like Amazon, Foot Locker, Walmart, Burger King, McDonalds, and other well known brands. Bed Bath and Beyond is closing 896 stores this year. Foot Locker is closing 545 stores over the next three years.

Most of us have experienced the thrill and convenience of spending our time in an airconditioned (or heated) mall, eating and drinking with friends and family, looking at the stores, and buying things we need or don’t really need. Increasingly however in many large US cities, many stores have closed. What we see now are boarded up space for rent, peppered by the occasional store that is still operating. Sometimes in areas that are no longer properly policed, we see broken store windows, grafitti, litter, homeless people on the streets, and often street crimes that go unchecked.

There seems to be a new trend now to show compassion to shoplifters and thieves. There is no longer an effort to stop them, so they just walk in and take all the items they want, and walk out without being stopped by security.

The theory of policing called the Broken Windows theory, which refers to the fact that if people see broken windows in a neighborhood, they take that as a sign that the area is lax in terms of security, and hence that builds on itself. Soon there is litter on the streets, graffiti, homeless people wandering around, and brings an increase in street crimes and drug trafficking. However Broken Windows has been misinterpreted as zero tolerance policing which led to abuses like racial profiling, stop and frisk and the like.

While there is no excuse for the police abuses that had occurred in many major US cities and towns in the past, the pendulum has clearly swung towards zero police presence in many areas. Many politicians have defunded the police departments in their cities, and this has led to zero police presence in many areas, which has led to a marked increase in crime.

If we are to take back our neighborhoods, even our previously expensive downtown districts which have now become hotbeds for crime, we need to strike a balance. Aside from a police presence, we need investments to upgrade the appearance of certain areas, remove the graffiti and street litter, place the homeless in shelters (not on the streets), and work with community leaders to effect discipline.

Face to face shopping in brick and mortar retail stores is still an important component of our GDP. Online shopping cannot possibly satisfy all our needs, since looking at the actual items on display will always be appropriate for certain items.

Only the efforts of the community and the police hand in hand can work to solve these problems, and convince these retailers that it is safe to come back again to these neighborhoods.

SOURCES:

https://www.businessinsider.com/stores-closing-in-2023-list
https://www.psychologytoday.com/us/basics/broken-windows-theory