Strongest Retail Markets Weather E-Commerce Storm

Muoio: “The rise of online shopping puts extreme pressure on the recovery of the retail sector.”

IRVINE, CA—It’s a clear indicator of the direction retail is moving in that the second quarter’s biggest story involved an e-commerce giant: Amazon’s $13.7-billion acquisition of Whole Foods Market. It’s indicative, says Ten-X, of “the broader trend of technology companies and non-traditional retailers disrupting traditional brick-and-mortar retail.” The uncertainty this disruption creates will be a challenge facing brick-and-mortar operators for years to come.

“The rise of online shopping puts extreme pressure on the recovery of the retail sector, demonstrated most clearly by bankruptcies of storied retail chains, sweeping store closures and shrinking footprints,” says Peter Muoio, chief economist with Ten-X. “For now, the sector is being sustained by strong economies and high incomes in some regions around the country, but it faces the risk of stagnation should an economic downturn strike.”