In the States, 80,000 stores are set to close within 5 years. In Europe, consumption will exceed 2019 thanks to the savings accumulated during the pandemic. UBS updates its US retail apocalypse estimate. Clothing and accessories will be among the most affected sectors. Conversely, Pierre Wunsch, a member of the European Central Bank (ECB) says savings set aside during the pandemic will fuel continental consumption, which will exceed 2019 levels for 3-5 years.
Currently, many stores are opening in the United States. According to data released by Coresight Research, there have been 3,169 closures and 3,535 inaugurations since the beginning of the year. This is explained by the fact that many companies are taking advantage of lower rents, more choice and a prospect of returning to purchases. For UBS, this will be a short-lived trend. As Cnbc explains, also due to the increase in online sales, which will be worth 27% of total sales in 2026, approximately 80,000 retail stores will close in 5 years. That is 9% of the total number. In addition to online, closures will be caused by the end of government subsidies. Shopping centres and stores inside them will pay the price, in particular for clothing and accessories. UBS expects around 21,000 closures from this sector by 2026.
Wunsch, a member of the ECB board and governor of the Belgian central bank, told Reuters that the eurozone economy is set to experience private consumption above pre-pandemic levels for 3-5 years. As soon as families can spend on dinners, holidays and more, consumption will restart. Private savings, according to Wunsch himself, have amounted to up to 25% of disposable income since the pandemic began, both as a precaution and due to the inability to spend. This has therefore created a “dormant demand” capable of fuelling consumption, with economic growth higher than that currently forecast by the ECB.