First, we have the retail chain closings that adversely effected REITs and CMBS. And Columbus, Ohio’s own Limited Stores announced in January that it is closing ALL 250 of its stores. And even Victoria’s Secret and Bath and Body Works are closing in Scranton, PA’s iconoic Steamtown Mall.
Now we have restaurants falling by the wayside but we can’t blame that on Amazon or digital competitors. The National Restaurant Association (NRA) released its same-story sales index for February and it shows continued weakening (although an improvement from August 2016).
Restaurant closings? Florida-based Bloomin’ Brands (NASDAQ: BLMN), the parent company of Outback Steakhouse, Bonefish Grill, Carrabba’s Grill, and Fleming’s Steakhouse, announced last week the company will shutter 43 of its 1,500 underperforming locations in 2017. 43 out of 1,500 stores is small relative to closing all Limited Stores. Even Appliebee’s, Chili’s, Ruby Tuesday’s, Buffalo Wild Wings and Magianno’s Little Italy restaurants are facing a bleak 2017.
While you can get delivery from many more restaurants than you used to, restaurants are not feeling the pinch like retail stores. Still, sagging wage growth is the culprit for both retail and dining out.
CMBX, the reference security for CMBS, has generally followed the stagnating wage growth since early 2015.
So while Amazon and the digital shopping trend is partly to blame. stagnant wage growth is another factor.
With stores closing at Scranton’s Steamtown Mall and Chili’s closing stores, where will Michael Scott get his baby-back ribs?