Retailers are increasingly worried that stores will go out of business and that they will not have enough stores to absorb the fallout from a mass store closure, analysts said.
The industry’s biggest worry is the impact of a mass retail store closure on retailers.
The industry expects a total of 4.5 million retail stores to close this year.
But the industry has been in a period of slow growth in the past few years, with a record number of closings last year.
It has already lost more than a million stores since 2009.
“The industry has not seen a meaningful decline in its growth over the past year and a half,” said Brian Lipscomb, senior vice president of retail consulting firm Lipscom.
There is also concern about whether the industry can absorb the losses and rebound in 2019.
Retailers were already suffering from an inventory crunch as people rushed to spend their savings in the recession.
Lipscer said retailers may have to cut prices to compensate for the reduced demand.
In 2019, retail sales are expected to be up 1.3 percent.
In February, sales fell 0.6 percent.
Analysts have been watching the industry closely because the industry is undergoing a transition.
Last year, retails grew at an annualized rate of 3.4 percent, and that was a drop from the 2.7 percent growth they were enjoying before the recession began.
This year, the industry will experience its worst growth rate in nearly a decade, at 4.3 million.
That means that sales will fall 5.4 million, or 10.4% from the 3.8 percent average annual growth for the past decade.
Lipscomb said he thinks the industry may have enough store space to absorb a total loss of more than 4 million.
He said there are several factors that could cause a mass retailer to go out.
One is the effect of the recession, which hurt retailers’ sales and profits, and is expected to continue to hurt sales in the months ahead.
Second is a slowdown in consumer spending, which is expected in the coming months, and could cause stores to go under.
Third, there are concerns that a mass closure will increase the number of stores and drive up rents, which could cause people to flee the area.
Fourth is the continued decline in sales of furniture, which has led to a sharp decline in consumer demand, which also hurts retailers’ profits.
And lastly, there is uncertainty over the economy and a slowing in growth that could make the industry less competitive and result in store closures, analysts say.
While the industry does have enough inventory to absorb an eventual loss of 4 million stores, it may be more difficult to absorb even a slight decrease in the number than a normal year, Lipscani said.
The retail industry’s stock has been falling for months now, falling more than 10% over the last two years.
For its part, the stock has recovered about 20% in the last month, though it has yet to regain its former lofty levels.
If stores close, the result could be a temporary boost to consumer spending.
However, Lipson said, the effects on consumers will be long-lasting.
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