Cities Will Weather The Retail Apocalypse. Suburbs May Not Be So Lucky.
One by one, the problems that America has long dismissed as “urban” have marched into the suburbs: crime, poverty, hunger, deindustrialization, drug addiction, civil unrest. The dissolution of community institutions. An aging stock of unwanted houses. To which we can add: the decline of retail. It has been a decade since the media declared the death of the mall, in a year that would be the first in a half-century that no new malls were built in America. It has since become apparent that the problem is a little bigger than that: Brick-and-mortar retail in general is gasping for breath. The Limited, a women’s clothing store, shut down 250 stores and laid off 4,000 workers earlier this year. Sears Holdings will close 150 stores, including 108 Kmarts, and Macy’s will close another 100. As anchor stores close, more and more malls are entering foreclosure. Financial instruments composed of debt from mall deals are looking as risky as their counterparts in residential debt did before the housing crisis. Several months of job losses in certain retail categories—at a time when the economy is otherwise healthy—have sounded the alarm for the transition that economists have long feared from the rise of e-commerce in general and Amazon in particular. Technological change spurred by new infrastructure and some favorable tax policies have radically changed the way Americans shop, and communities built around old-style shopping will find themselves saddled with obsolete structures. That sounds like news. But it’s exactly the way you could describe the decline of urban retail that seized the American downtown in the second half of the 20th century and never let go. To some extent, cities are well-positioned to weather the current shift, since the jobs that look vulnerable right now left for the suburbs years ago. Read more at Slate.
