'Walmart destroyed retail'
Public enemy No. 1 in the retail industry today is Amazon, but the biggest threat as we know it didn't begin with the internet. It began with Walmart.
"Walmart destroyed retail," retail consultant Jan Kniffen said on Monday on CNBC. "They wrecked every other form of retailing because it was a race to the lowest price, and they were the lowest price."
As Walmart beat out other discount retailers like Gold Circle in 1988 and Venture Stores in 1998, the company expanded rapidly across the country. Today, there are more than 5,000 Walmart and Sam's Club locations in the US alone.
Walmart's dominance has created an environment where it's difficult for retailers to compete in an overcrowded market. The issue is complicated by recent changes in the retail industry, with more shopping being done online — another factor that is creating more competition for retailers. According to job-placement firm Challenger, Gray & Christmas, retailers have cut almost 44,000 positions so far this year.
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Just last week, Macy's announced that would it shut down 100 locations early next year, as mall traffic across the US slows. And Walmart closed 269 locations earlier this year.
The root of the problem, according to Kniffen, is that there are simply too many physical retail stores in the US.
Kniffen isn't alone. Last week, Macy's CFO, Karen Hoguet, said in an earnings call that"this country is over-stored, given evolving customer shopping habits."
Physical shopping locations can provide incentives for consumers to visit in the form of coffee shops, hair salons, and other things that boost the quality of the experience — but, ultimately, there is a surplus of subpar stores and malls that consultants like Kniffen believe won't be open in a few years.
"We've never been this over-stored before," Kniffen said.
Walmart did not reply to a request for comment.
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