Ripple effects of store closings.

 CHAINS STORE AND FRANCHISES CONTINUE TO ELIMINATE STORES

REPERCUSSIONS ARE NOT EASILY CALCULATED

We are witnessing the largest shrinking of store locations in modern history. While many talk of major department store closings in large cities due to retail theft and declining revenues, it is much more widespread. 

The franchise locations of many fast food stores are shrinking by the day. We see Starbucks, Dunkin Donut, Subway, Dairy Queen and even Chick Fillet trimming stores that have not recovered since the pandemic. There are very few stores that have not been significantly affected. This retrenchment has affected every retail enterprise in the country. It is also affecting stores privately owned and operated. 

While the loss of revenue for the owners and the loss of jobs by the employees is evident, there are going to be long lasting and fareaching consequences.

We see that the commercial Re-estate business is in serious trouble, many lending institutions are underwater on these properties and it is unlikely they will get better in the near future. It is expected that many of these institutions will also be going out of business. 

Then there is the loss of tax revenue that will result form these closings. and eventually there will be challenges to the property tax revenue based on the declining value of these retail locations. We are probably just in the beginning of this coming crisis.

Most retail business's suffered under the consequences of the pandemic restrictions. Then they have been hit by higher energy costs, food costs and a lack of personnel to cover the open hours of the stores. Many cut hours because of a lack of personnel, increased costs to hire workers, then the required rise in prices have lowered the volume of business. There are very few food and department stores that have increased their revenue or opened new stores.

Many chains are incrementally closing locations to stop the bleeding, hopefully eventually the remaining locations will be able to stabilize and become profitable. The long lasting effects are not easy to calculate, and they will be with us for a long time.