Michael Gioioso has one wish for shoppers’ habits in the coming months.
“The balance of 2020 and 2021 need to be the era of localism, of shopping local because otherwise, we are going to have a very different society,” said Gioioso, Vice President, Brokerage at MacKenzie Commercial Real Estate Services.
Gioioso points to two extreme and opposite trends that have occurred in retail since the pandemic started.
Big box retailers have experienced surging growth in 2020. In the first half of the year, Target added $5 billion to its market share. In the last quarter, Target’s online sales grew by 24 percent and that performance was replicated or bested by other large retailers. Home Depot’s online sales grew 23 percent, Wal-Mart’s grew 97 percent and Lowe’s by 153 percent. Meanwhile, Amazon dwarfed everyone in sales.
“Amazon’s ability to take market share during this pandemic has been absolutely dizzying,” Gioioso said. “The next 10 biggest retailers — which starts with Wal-Mart and goes, I think, to Best Buy — all of their market share doesn’t match Amazon.”
At the same time, most small, local retailers have been hit hard by the pandemic. The National Federation of Independent Business estimates that sales among small business from May to June this year fell 28 percent below the same period last year. A survey by Yelp reported that 155,000 small businesses had closed in the U.S. from March 1 to August 11, and estimated that about 91,000 of those closures would be permanent. The American Bankruptcy Institute estimates that the number of small businesses filing for bankruptcy in 2020 will be 36 percent higher than in 2019.
Small, local retailers, Gioioso argues, are key to the culture and vitality of many valued shopping areas. “The reason that towns are towns and many main streets are great is these unique, small businesses. We are rapidly losing that.”
If shoppers don’t support small, local retailers and more of those companies fold, many Americans’ shopping experiences could be reduced to bland, online transactions, he said.