Two of America's largest retailers have recently announced store closures and lay offs. Walmart is closing 269 stores nationwide, including stores under the Express, Neighborhood Market and Supercenter names. Macy's is also closing 40 stores in the early part of 2016.
The said closures are forecasted to create a "domino effect" for malls. Once large stores like Macy's and Sears close, it will be hard for mall owners to replace them, related Davidowitz & Associates Chairman Howard Davidowitz.
This is bad news for the commercial real estate market as two dozen malls have already shut down in the last four years, and another 60 malls are already about to close, according to data from analytics firm Green Street Advisors.
Experts at RBC Capital Markets predicted that more Walmart and Macy's closures will follow as more customers prefer to shop online instead of going to stores.
"Macy's announced store closings could have a number of implications on the overall retail landscape," they explained. "We believe Macy's decision will catalyze other specialty retailers and department stores to take a harder look at their boxes in these underperforming centers."
Furthermore, analysts at New York-based research firm Conlumino highlighted that Walmart's decision to close more than 200 stores is a proof of "how much the retail landscape has changed."
"The blunt truth is that while stores remain a vital part of the retail mix, they are not quite as relevant as they used to be," said Conlumino CEO Neil Saunders. "Walmart's decision is part of a larger shift that will be played out across all parts of the retail sector over the coming year and beyond."
Saunders noted that online marketplaces such as Amazon are among the major factors why retail and department stores are less appealing than they used to be.
"There was a time when a local Walmart would be the go-to destination for certain products, mainly because of an absence of alternatives," Saunders stated.