'The big will get bigger': UBS expects 100,000 stores to close across the US in the next 5 years — and Walmart, Costco, and Target could be the among the last left standing

• In a recent UBS report, a group of analysts estimated that 100,000 stores could close in the US in the next five years.
• This is mainly due to the rise of ecommerce, the report said.
• COVID-19 will also play a part in accelerating this trend.
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By 2025, there could be 100,000 fewer stores in the US. At least, that's what a group of UBS analysts is prepping for.

In an in-depth report to clients this week, these analysts laid out why this could likely happen and how they expect the coronavirus pandemic to have a long-lasting impact on the retail sector.

While coronavirus isn't the only reason for upcoming store closings, the analysts expect the effects of the pandemic to accelerate a trend that was already in motion as shoppers change their habits permanently in a post-COVID-19 world.

The most fundamental reason for stores closing down in the future will be the rise of ecommerce, the report said.

Online giants such as Amazon were already having a detrimental impact on brick and mortar retailers but with customers increasingly being forced to shop online during this time, UBS expects that many will not go back to stores like they once had or at least limit their visits.

This isn't only because of new habits put in place during the pandemic but also because there's a likely to be a lingering fear around going to crowded spaces in the future.

According to the report, apparel, home furnishing, consumer electronics, and grocery companies will see the largest number of store closings in the next five years. Many of these stores were already struggling before the pandemic hit and are now faced with the challenge of staying afloat as large parts of the country remain under lockdown and nonessential stores remain closed.

Grocery stores are in a more unique position here, however. While these stores have been allowed to remain open, many more people are choosing to shop online for groceries at the moment.

Experts expect this to have a long-term impact on the sector as more people test out these services and become more accustomed to using them. "We expect this to pull forward commence adoption of online grocery growing forward," the report said.

Meanwhile, mass merchants – the Costcos, Walmarts, and Targets of the world – are likely to benefit from these store closings because of their scale and breadth of offering. "Our overarching belief is that the big will get bigger," the report said.

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