Will Small Businesses Face The Brunt Of Retail Closures?
Investment banking firm UBS predicts that one in five retail stores will close over the next five years, with significant losses in 2021 due to the COVID-19 pandemic. What does this mean for small businesses that might feel the most impact, and what does that mean for the folks on main street?
Voice of B2B, Daniel Litwin talked with Nick Mathews, CEO of Mainvest, a company focused on aligning incentives between local community members and small businesses to encourage Main Street economic development, on MarketScale TV about which sectors are going to feel the most impact.
The information coming out of UBS is no joke, as it’s predicted that in a worst-case scenario, 150,000 stores will be lost over the next five years. The best-case scenario is to lose only 81,000. Small businesses are expected to be hit hardest, with small companies not having the financial resources available to weather the storm. The industries that are going to be hit the most are clothing, electronic, and furniture stores.
“One of the interesting things people aren’t talking about is new business creation,”
Nick Mathews, CEO of Mainvest
“One of the interesting things people aren’t talking about is new business creation,” Mathews said. He noted that in the third quarter of 2020, there was 1.7 times the amount of businesses created, and the cycle of new companies coming in has to be weighed with the businesses going out.
“The new businesses coming are going to be adapting to this new climate and improving the retail space,” Mathews said.
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