Loss of Local Retailers May Translate to Reduced Ad Spending

The worst of the recession may be behind us, but the shakeout in the traditional retail industry is expected to last through 2012. Several thousand stores are predicted to close up shop across this country. This change will impact media companies who are competing to capture retailer advertising budgets.

After a rough year in 2010, industry analysts says the number of store closings has slowed in 2011. The closings through the third quarter of this year totaled 3,196. A few high-​profile closings have included Syms and Filene’s Basement. But next year may result in a different scenario. Michael S. Wiener, president and CEO of Excess Space Retail Services Inc., is anticipating the closure of up to 5,000 stores nationwide.

The industries most afflicted with weak sales at traditional stores range from apparel to footwear to book retailers. Both consumer electronics and specialty retail are seen as vulnerable going forward. While it is possible that a strong holiday season will reduce the number of 2012 closings, a negative outcome to the debt crisis in Europe could translate into an even greater closure number.

Media companies can benefit from this scenario in the short run by contacting retailers regarding going out of business ad opportunities. In the long run, media companies in many markets may find themselves needing to develop new prospects and clients to make up for accounts that have gone out of business.

[Source: Misonzhinik, Elaine. Store Closings Likely to Top 5,000 in 2012. Retailtrafficmag​.com. 10 Nov. 2011. Web. 8 Dec. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.