CNN’s Democratic debate, night 2 – CNN

Andrew Yang said: “Raise your hand in the crowd if you’ve seen stores closing where you live. It is not just you. Amazon is closing 30% of America’s stores and malls.”  

Facts first: Yang is right that up to 30% of malls may close in the next few years, but that’s not all because of Amazon.  

Malls have been closing fast, and will continue to do so, according to Wall Street retail analysts. A report from Credit Suisse in 2017 projected that between 20% and 25% of malls would close within five years. Cowen & Company estimated that 20% of stores in large mall chains will close, and that all class C and D malls — which comprise about 30% of the total — are at dire risk.    

E-commerce has played a role in the shrinkage of brick and mortar stores, rising from less than 1% of all retail in 1999 to 10.2% now, according to the Census Bureau. Amazon comprises nearly half of online retail in the United States, according to EMarketer.  

But retail has also been challenged by overcapacity, given a years-long retail boom that saw real estate developers building more malls than consumers really wanted. That bubble is now bursting, as consumer preferences have shifted away from enclosed malls. Also, many large chains — from Payless Shoes to Toys ”R” Us — have slipped into bankruptcy after being acquired by private equity firms that loaded them up with debt.