Despite recent store closings and Chapter 11 filings, an in-depth analysis of the U.S. retail sector for the first quarter of 2017 by Creditsafe USA finds the sector remains incredibly strong and shows no signs of slowing down. The report, The Creditsafe Guide: Demystifying the US Retail Industry, states the true strength lies in the sector’s many sub-industries and its broad variety of businesses. There is “no indication of weakening in the near future,” according to the analysis.
When compared to other industries, the retail sector is the second largest in the United States in terms of the number of businesses, encompassing nearly 14%. It ranks third as far as the number of individuals employed by the sector with nearly 10% of the country’s workforce, the report states.
The true strength lies in the sector’s many sub-industries and its broad variety of businesses. There is no indication of weakening in the near future.
“Our study reveals that while a number of the big retail players have experienced financial hardships, there is a huge portion of the retail sector that are performing very well,” explains Matthew Debbage, CEO of Creditsafe USA and Asia. “In today’s retail landscape, the e-commerce giants such as Amazon and Walmart are giving the traditional department stores a run for their money. Interestingly, however, it is the small companies with either less than 100 employees or sales less than $10M that are experiencing rapid growth. They are truly thriving.”
Highlights from the report show 44% of retail companies are rated low risk compared to 42% of business in other industries. There are also 12% lower instances of bankruptcy in the retail sector compared to business in other industries
“There is an apparent change happening within this sector, and companies that are embracing the change will become stronger,” Debbage says. “And, it’s inherently clear things are still booming in the retail sector.”
The analysis notes that the U.S. retail industry is currently undergoing an incredibly complicated transition and states “gone are the days when the traditional large brick-and-mortar retailers dominate the landscape due to the rise of the countless e-tailers such as Amazon, Overstock and, most recently, Walmart.”
But while the Internet-based retail market shows no sign of stopping, a quiet revolution taking place within the traditional brick-and-mortar world reveals the growing strength of niche retailers.
“These boutique businesses provide unique specialty goods and services that the retailer powerhouses do not,” according to the report. “Rather than one type of retailer taking over the marketplace, it appears there are opportunities for ones that are big and small, as well as those from the online and off-line worlds.”
To learn more, download the report here.