I’m surprised it took this long, but DISH Networks is closing down the rest of the Blockbuster stores.
Apparently the average store was 5000 square feet, which means at its peak Blockbuster accounted for 45 million square feet of retail space! According to this article there is 14.2 billion square feet of retail space or 46.6 square feet per capita. According to the same article there were 1.1 million retail establishments in the US, or 1 establishment per every 313 people. Walmart generated revenues of $444 billion in 2012, $310 billion of that in the US. In fact the top 10 retail establishments alone generated $2.2 trillion of revenue in the US alone!
According to this article, we spent $200 billion online in 2011 and that is expected to rise to $327 billion in the next couple of years, although my guess is that is low. In 2012, Amazon alone generated $61 billion in revenue, all online of course.
I have shopping down the street. In fact if you live in the US almost everyone has shopping down the street. The former Borders store is still completely empty and across the street the remnants of the Blockbuster sign are still visible even though it closed years ago. Across town the Party Warehouse store sits empty and over by the mall the former Circuit City store has never really found a permanent new resident.
Meanwhile many more are on the brink. Can Best Buy survive and its 56 million square feet of retail space? How about Sears and J.C. Penney?
Why do I bring all this up?
Think of all the retail space Blockbuster controlled at its peak. 9000 stores. 45 million square feet. Think of all the employees that worked there. All those stores, all those employees without jobs, gone. Done in by Netflix, primarily, who employs next to no one.
If Walmart gets destroyed by Amazon then where do people work? Does Amazon hire them all as local delivery people?
So here’s the theme running through my head: as more businesses go online, as Amazon does to Walmart and Best Buy what Walmart and Best Buy did to mom and pop shops everywhere, what moves into these retail outlets? And where does everyone work? And if people aren’t being paid, then how do they buy goods and services, which keep other retail stores alive? And if people aren’t making money then who pays taxes that pays for the military, social security, Medicare, schools and all the other things a lot of people have come to expect from our society?
I’m not saying it’s going to play out this way. Something has always come along and smart people have shifted, from farms to factories to retailers.
But it doesn’t mean we can keep assuming the same rules apply, either.