Bed Bath & Beyond filed for bankruptcy on Sunday, and it suggests a bleak future for brick-and-mortar retailers.
New research from investment bank UBS estimates that 50,000 retail stores out of the 940,000 currently operating in the U.S. will close their doors by 2027 (not including gas and food-service stations), Yahoo Finance reported.
Related: Bed Bath & Beyond Plans to Raise Over $1 Billion to Pay Debts and Avoid Bankruptcy
“While there was a pause on store closures over the last few years, we believe this activity is set to sharply accelerate moving forward,” UBS retail analyst Michael Lasser said.
Several factors will contribute to the eventual mass shuttering, including decreases in consumer spending and available credit, and increases in the penetration of retail shopping and cost to run retail stores, according to Lasser.
The pandemic was also harder on Bed Bath & Beyond than it was on its competitors, owing to the company’s decentralized system and less developed ecommerce technology, The New York Times reported.
Per Lasser’s calculations, if 50,000 stores close within the next five years, and the average sales per store is $5.7 million, that will leave $285 billion in retail sales “up for grabs” — giving major competitors better-positioned for online shopping the chance to capitalize big time.
