These days, your size or scope don’t really matter. If you’re in the retail business, you’re exposed to risk.
Related: Another giant cosmetics brand closing store unexpectedly
Now, the kind of risk — and its frequency or severity — can vary from company to company.
Some retailers are at risk of being gobbled up by larger competitors.
We saw this happen quite frequently and rapidly during the pandemic. Smaller mom-and-pop book shops, package stores, stationary shops, and even jewelers found it harder to hold on.
Mass closures across the country forced many stores to shut their doors indefinitely. And many of these smaller shops didn’t have the cash flow to weather weeks- or months-long closures.
So they were forced to close up shop for good. And in their place, larger corporate incumbents moved right in.
For customers, this wasn’t all that bad. Many of us were still able to purchase our books, wine, stationary, or other needs through a large corporate store like Target or Walmart.
But the changes were detrimental to small businesses across the U.S.
Large companies struggle, too
But big corporations have their fair share of difficulties as well.
Many large-scale retailers like Target and Dick’s have sounded the alarm on widespread theft, which has been difficult to quell since 2020.
These stores are large — often well over 100,000 square feet — making it difficult to track every customer.
More closings:
- Popular local Dairy Queen rival suddenly closing, no bankruptcy
- Another big Mexican chain closing down restaurant, no bankruptcy
- UPS suddenly closing more stores amid chaotic new change, layoffs
- Popular fast-food burger chain closes all restaurants in key area
So some less-scrupulous customers have taken advantage of this.
An uptick in inventory shrink, of the industry term for theft and other losses, has hit large-scale retailers’ profits hard. In 2023, it’s estimated that shrink made up for approximately 2% of overall sales, a 10-year high.
Amazon makes a tough decision
Even if you’re doing everything right and business seems to be good, retailers are still in the business of pleasing customers.
And customers can have extremely fickle taste.
While some sectors of the retail industry boomed in recent years, interests almost always wane, and businesses must account for these changes.
Related: UPS Store suddenly closing three more locations
Now, Amazon (AMZN) will cut a little under 100 jobs from its Books division, mostly across its Kindle and GoodReads business.
Amazon maintains that the job cuts will make operations more efficient; however, book sales were down about 1% in Q1.
Both nonfiction and children’s book sales were down, but fiction was up.
“As part of our ongoing work to make our teams and programs operate more efficiently, and to better align with our business roadmap, we’ve made the difficult decision to eliminate a small number of roles within the Books organization,” an Amazon spokesperson said. “We don’t make these decisions lightly, and we’re committed to supporting affected employees through their transitions.”
