How Can Retailers Survive?

[VAMatt]

brandon1546 said:

The United States is clearly "over-stored" as too much retail was built in the past 10+ years. The U.S. will no doubt go through a period of store closures and consolidation, but it won't go on forever. Stores like the Department Stores are certainly not doing well, but many other retailers are expanding.

In terms of video games retailers, Walmart, Target, Amazon and Best Buy aren't going anywhere anytime soon. Gamestop is being challenged both by the online price transparency that Amazon and others provide, as well as the trend to buy games online digitally, since this eliminates the ability to buy/sell used games. Gamestop has almost 4,000 video game stores in the U.S., and I would expect over time that number will have to come down meaningfully, but I don't necessarily think it will be a Blockbuster Video-like collapse, although that is a possible scenario.

The US definitely needs some bricks and mortar retail contraction.  You can thank the monetary manipulation of the FED for that.  With interest rates super low for the last decade, everyone levered up and expanded like crazy.  

As for Gamestop, they are being squeezed on all sides.  Pricing on new games is much better elsewhere.  Digital sales skip them on the front end, and eliminate the possibility of later used sales.  The "Think Geek" stuff doesn't carry the same margin as used games.  So, I think they'll either start scaling back the store count dramatically and fairly rapidly, or they will be at risk of the Blockbuster scenario.  I imagine they can sustain a profitable business.  They just have to read the writing on the wall and adapt before they burn through all of their cash trying to maintain the current store count.