US retail industry needs to close 75,000 stores in the next few years

UBS expects that with the surge in e-commerce sales, US apparel retailers, consumer electronics companies and home furnishing companies will need to close more stores.

In a report to clients, the bank said that by 2026, the share of online sales in total US retail sales increased from 16% today to 25%, and about 75,000 retail stores (excluding restaurants) needed to be shut down.

This means that for every 1% increase in online sales penetration, there are about 8,000 physical stores that need to be closed. This growth is largely driven by Amazon, which is expected to account for about half of the US e-commerce market by 2026.

According to the company's hypothetical online penetration rate in each retail segment, UBS estimates that it will be closed in the 75,000 stores, including approximately 21,000 clothing stores, 10,000 consumer electronics stores, and 8,000 homes. Supply stores, 1,000 home décor stores, and about 7,000 grocery stores.

According to market research firm Coresight Research, the US retail industry has announced the closure of more than 5,000 stores this year.

However, UBS pointed out in the report that more store closures "should help increase the productivity of the remaining stores."