Debunking the Retail Apocalypse

Authors
Lee Holman
Greg Buzek

August, 2017
Thank You to our Research Sponsors
CONTENTS

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Introduction

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Into the Data Some Definitions

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What is the
background for
the negative
narrative?
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MARKETING
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The Start of the Retail Apocalypse Narrative

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Amazon Becomes the Villain

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Key Trends & Drivers

Figure 2 Retail Square Footage Global Comparisons

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Figure 1 Historical Fed Rates

Source Cowan Research

Source Federal Reserve Board of Governors'

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Key Trends & Drivers, cont

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Key Trends & Drivers, cont

Figure 3 Household Income by Quintile

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1996 2015 Real $ %
Growth Income
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96 -15 Growth
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Lowest 8,595 12,457 3,862 44.9%
o Second 21,097 32,631 11,534 54.7%
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o Third 35,486 56,832 21,346 60.2%
o Fourth 54,922 92,031 37,109 67.6%
o Highest 115,514 202,366 86,852 75.2%
o Sources: BLS, Census Bureau Historical Income Tables H1/H3
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 Shrinking Middle Class

Figure 4 The Middle Class is Shrinking Figure 5 Share of US Income held by the Middle Class has Plunged

Source: Pew Research Center

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Debt and Other Issues

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Figure 6 Student Loans a Big Part of Household Debt

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Source: Federal Reserve Bank of New York, Bloomberg

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What is
Really
Happening?
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MARKETING
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The Real Story

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 Retail is Growing, Not Declining

Source: IHL Group, Company Reports

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 Banners opening vs closing stores

% Net Opening Stores vs Net Closing

Superstores/WH Clubs
Convenience Stores
Mass Merchandisers For each company
Specialty Softgoods closing stores
Specialty Hardgoods
2.7
Drug Stores
Food / Grocery are opening stores
Fast Food Source: IHL Group, Company Reports

Bar / Restaurants
Department Stores

% Banners Closing Stores % Banners Gaining Stores

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 Banners opening vs closing stores

Source: IHL Group, Company Reports

1.0 is breakeven number of opening vs closing

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 Retail Store Count Growth

Source: IHL Group, Company Reports

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 Store Count Decline

Source: IHL Group, Company Reports

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 Restaurant Count Growth

Source: IHL Group, Company Reports

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 Restaurant Count Decline

Source: IHL Group, Company Reports

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 Deeper Dive Drug and Cosmetics

Sources: US Census on Retail Trade, IHL Group, Company Reports

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 Deeper Dive General Merchandise

Sources: US Census on Retail Trade, IHL Group, Company Reports

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 Deeper Dive Softgoods

Sources: US Census on Retail Trade, IHL Group, Company Reports

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 Deeper Dive Hardgoods

Sources: US Census on Retail Trade, IHL Group, Company Reports

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Deeper Dive Restaurants

Sources: US Census on Retail Trade, IHL Group, Company Reports

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BUSINESS
MARKETING
PRESENTATION
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6 Things Retailers Must Do

Figure 7 Leaders vs Average Retailers on IT Spend Growth

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Source: 2017 RIS News / IHL Group Store Systems Study

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6 Things Retailers Must Do

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Source: 2017 RIS News/IHL Store Systems Study

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 Final Thoughts

* US Census Monthly Retail Trade 1992-2016 Non-Adjusted, Retail and Food Service Sales Total

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Methodology
BUSINESS
MARKETING
PRESENTATION
SLIDES
How We Got Here

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IHL Group Enterprise License
and Fair Use Agreement

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Thank You