E-Commerce is Wiping Out Mall Retailers One by One. Here’s the Data

E-Commerce is Wiping Out Mall Retailers One by One. Here’s the Data by Wolf Richter for Wolf Street

Department store sales hit a new record low in the data going back to 1992.

E-commerce sales in the fourth quarter soared 12.1% from a year ago to a new record of $132.8 billion (seasonally adjusted), the Commerce Department reported this morning. For the whole year 2018, e-commerce sales blew through the $500-billion level for the first time, reaching $513.6 billion, up 14.2% or $64 billion from a year ago.

Not seasonally adjusted, e-commerce in Q4 jumped to $158.5 billion, 11.2% of total retail sales. E-commerce sales have doubled over the past five years.

E-commerce includes sales by the online operations of brick-and-mortar retailers, such as Macy’s, Walmart, and Best Buy, along with the sales of online-focused retailers, from small operations all the way up to Amazon.

People still say that e-commerce accounts for only 11.2% of total retail sales and therefore doesn’t matter. But this metric is misleading because e-commerce doesn’t yet seriously compete with a number of retailers, including gasoline stations, new and used auto dealers, and grocery and beverage stores. These three categories alone account for 52% of all brick-and-mortar sales.

Where the e-commerce bloodbath takes place is in other categories, including – with some choice casualties in parentheses:

The chart below shows who is winning this race. The blue line represents sales at these mall stores, and the red bars represent e-commerce sales. Note how resistant online sales were during the Great Recession: They dipped, but only briefly, and then continued soaring. But sales at mall stores took a deep dive during the Great Recession and have still not recovered from it, and will never recover from it:

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Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.