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Hitting The Bricks Hard: Retail Was Weak In December, As Walmart Cuts Back

Store purchases dropped 0.2 percent last month, despite last minute holiday surge; Meanwhile, Walmart said it was closing 269 stores globally.

Courtesy of the NRF
Courtesy of the NRF

While the picture isn’t entirely bleak for brick-and-mortar businesses this holiday season, the signs of struggle are pretty clear as the National Retail Federation reported that December retail sales were down 0.2 percent even as holiday shopping dollars were up 3 percent year-over-year to $626.1 billion.

It’s worth noting that the the NRF, which brings its Big Show to New York’s Javitts Center this weekend, had previously forecast 3.7 percent holiday sales growth.

Meanwhile, non-store holiday sales — which account for a roughly 19 percent of total $3.2 billion retail business during the period — grew 9 percent to $105 billion.

In other dismal retail news, big box giant Walmart it would close 269 stores in the U.S. and globally. In context, that’s a mere 2.3 percent of its total 11,600 stores worldwide. The company will close 154 locations in the U.S., including the company’s 102 smallest “format stores,” Walmart Express, which had been in “pilot testing mode” since 2011.

walmart fab 5Walmart plans to focus on building up its Supercenters, improving its Neighborhood Markets, and growing its e-commerce business, which includes expanding online buying and in-store pickup.

The news comes amid a flurry of large retail chains like Macy’s acknowledging the tougher retail climate as stores try to find a way to manage costs and appeal to younger demographics who tend to look for discounts.

While not a panacea, the current state of retail demands that “omnichannel” strategies such as the one outlined by Walmart be taken more quickly — and smartly.

Swirl's Hilmi Ozguc
Swirl’s Hilmi Ozguc

Even as roughly 84- to 94 percent of sales still occur in physical shops, Hilmi Ozguc, CEO of beacon provider Swirl Networks, noted that retailers need to look more closely at e-commerce rivals or find that they too will have to make difficult cutbacks.

“What the NRF 2015 Holiday shopping results reveal is that ’21st century’ retailers like Amazon continue to be the clear leader in understanding shoppers’ preferences and delivering highly-personalized experiences – and this holiday season shoppers rewarded them for it,” Ozguc said. “By comparison, traditional retailers are failing to bridge the physical and digital worlds  – and that’s impacting both loyalty and sales. Today’s consumers live in an “always-connected” world and expect no boundaries between the online, in-store and mobile shopping experience. Ultimately, mastering omnichannel marketing must be a top retailer priority in 2016.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.