The Economist May 9th 2020 United States Lexington | What’s in store “The pandemic threatens devastation to the retail industry that built America”
Retail was already taking on significant water, from online line competitors like Amazon, before the pandemic but this event is a dramatic sinking. Once-upon-a-time the big urban department store was the center of life in downtown America. It was patriotic, retailing was part of democracy. “During the Great Depression…retailers had ‘Buy Now’ campaigns”. W said after 9/11 “shrug off terrorism and hit the stores”.
Lexington likens the Urban Department Stores to “America’s answer to Europe’s cathedrals”. Big, brightly lit and full of extravaganza. They were influential institutions in their own rite, they pour some profit into advertising and did civic-minded activities like hosting the Macy’s parade for example.
After the WWII families and departments stores moved out to what became more family-oriented suburban malls leaving a behind a ghost downtown. Many of these malls became more than shopping, hosting entertainment and amusements.
With the pandemic final blows are coming to J. Crew, JC Penny and in all 300 department store firms will close. Macy’s has shuttered 775 stores but will reopen about 70 that will operate “around 15% of their regular trade”. Malls just being developed like New Jersey’s $5B “American Dream Mall” will reduce retail allocation from 45% to 30% as a result of the pandemic.