By Senad Karaahmetovic
UBS analysts expect to witness accelerated store rationalization in the United States in the next few years, a trend that is expected to benefit larger, well-capitalized players.
“Store consolidation experienced a reversal of the long-standing trend in ’21 when ~11k net stores were added across the US. Now, the trend of store closures has resumed,” the analysts said in a client note.
They remind investors that Bed Bath & Beyond (NASDAQ:BBBY), Foot Locker (NYSE:FL), Tuesday Morning and others closed their stores recently. Overall, they expect to see over 50,000 store closures in the U.S. over the next 5 years.
According to UBS, there are ~940,000 stores in the U.S. (excluding gas and food services).
“As this happens, we believe this trend will benefit the large, well-capitalized retailers HD, LOW, WMT, TGT, COST) and those with unique differentiations (FND, ASO, EYE) who stand to capture a disproportionate amount of market share,” analysts said in a note.