The different segments within Retail Industry are in various phases of their life cycles. Typically, an industry or industry segment is considered to be in a decline phase of its life cycle when growth falls below GDP. In contrast, a growth phase occurs when industry revenue outpaces GDP, while a mature phase occurs when revenue growth mirrors U.S. GDP.
- The Big-Box & Department Store Retailer segment is declining. In the 10 years to 2018, this segment’s value added, which measures the Big-Box & Department Store Retailer segment’s contribution to the overall economy, is expected to decline at an annualized rate of about 0.2%. Meanwhile, U.S. GDP is anticipated to rise at an annualized rate of approximately 2.0% over the same period. The recession took a toll on the Big-Box & Department Store Retailer segment and many companies have failed to adapt to a post-recessionary environment in which consumers are easily able to compare prices and access online retailers. In addition, the number of big-box and department stores is declining as Walmart and Target continuing making strong moves into the warehouse clubs and supercenters (and out of the traditional big-box store model).
- The Warehouse Club & Supercenter Retailer segment is mature. In the 10 years to 2018, the segment contributed approximately 3.4% to the U.S. economy annually on average. This segment is expected to continue to steadily contribute above the expected 2.0% U.S. GDP over the next 5 years. In addition, the number of enterprises in this segment has declined due to mergers and acquisitions during the five years to 2013, indicating the segment’s mature state.