Too Much Digital Competition, Or Too Many Stores?

By Matt Pillar, chief editor

June 2014 Integrated Solutions For Retailers

Overstored. Merriam-Webster defines the word quite simply as having more stores than the market will support. Just a few years removed from the Great Recession, which marked a massive paring-down of brick-and-mortar stores in virtually every segment, the statistics tell us we’re still significantly overstored.

Accenture’s analysis of 29 leading U.S. retailers indicates that between 2005 and 2010, total retail square footage increased by 38 percent, with averages climbing from 2,497 square feet in 2005 to 3,458 square feet in 2010. The number of stores in operation increased 21 percent. According to the Produce Marketing Association (PMA), the problem is particularly vexing in grocery. From 1995 to 2012, supermarket sales-to-square-footage growth was wildly lopsided; sales grew by a healthy 43 percent, while square footage grew by a whopping 69 percent.