It saddens me when people lose their jobs. I know what it feels like since my father lost his job when I was a sophomore in high school. Business closings and job losses create hardship and anxiety for people.
Ken Kister and other investors have been working very hard to strengthen the Ashtabula Mall, which employs at many local residents, and the Mall provides essential shopping amenities needed by community residents. At the same time, retail trade is a dependent sector of the economy, and not a driving sector like manufacturing, financial services, transportation, and agriculture.
Can anything be done to prevent the K-Mart store closing at the Ashtabula Mall? It’s unlikely since the store closing is a part of a larger corporate downsizing/rightsizing decision. Sears is struggling to survive! Sears, who owns K-Mart, has been ailing for a long time. There is a major shakeout occurring in the national and international retail sectors.
The retail sector is adjusting to lower consumer spending levels and an economy that is hanging on by a thread (in my opinion). If you are interested in what is driving the retail decline, please read this article and this article and then this article. Want to do a deep dive into the retail sector? Click here to download a recent national study of the retail trade sector.
What drives retail trade? Personal income, consumer confidence, and interest rates drive retail demand. The profitability of individual companies depends on efficient supply chain management and effective merchandising and marketing. Large companies have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by selling unique merchandise, providing superior customer service, offering a distinctive shopping experience, or serving a local market.
While large companies dominate some retail sectors (such as mass merchandisers and grocery stores), other US sectors (such as auto dealers and convenience stores) are fragmented. Many specialty retailers are single-store operations. Imports are a significant part of the US market for many retail categories, including apparel, shoes, computers, electronics, toys, and cut flowers. Due to low labor costs, manufacturers in Asian countries, such as China and India, play an important, and sometimes controversial, role in the supply chain for many retailers.
The Internet and increasing consumer connectivity are transforming the retail sector, with physical stores losing market share to online operators. In 2015, total US e-commerce sales were estimated at $341.7 billion (7.3% of total retail sales), an increase of nearly 15% from 2014.
Ashtabula County is feeling the effects of the shifting sands of the national economy. The most vulnerable industries, companies, and institutions are the first to “go under” when economic pressure mounts. The coal industry and therefore the railroads transporting coal are suffering. This explains the N&S coal dock closing in Ashtabula and the planned contraction by CSX. It also explains the threatened re-sizing of the Coast Guard station in Ashtabula. And it explains the Super K-Mart store closing at the Ashtabula Mall. It also explains why a number of planned local business expansions have been delayed — Business owners and managers are not confident about the future of the overall economy.
Stay tuned. We will be providing additional insights and advice on the “new economic phase” we have entered.