Project description

With sky-high consumer confidence, historically low unemployment and a growing economy, retail should be booming. Yet more chains are filing for bankruptcy and rated distressed than during the financial crisis. E-commerce is just a small part of the problem; the Internet has no doubt disrupted retail, but with about 85 percent of all purchases still made in stores, competition from online retailers does not fully account for the acceleration in retail store closings and bankruptcies. What’s really driving the long overdue shakeout is all the debt retail chains hold. And that pain is just beginning. This debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.

What makes this project innovative?

Bloomberg undertook the deepest look yet into retail debt and all its spillover affects across the economy. Bloomberg reporters scoured Moody's and Fitch reports, mined bankruptcy data and financial instruments like CMBS, and eventually even managed to crack bank-level data. From a content perspective, this piece doesn't focus on the familiar theme of brick & mortar stores' battle against Amazon. Instead the focus is on the over-abundance of chain stores (how many big-box stores are sustainable in a given area?) and the debt these stores took on—debt that is now coming due. As credit markets tighten and become much less accommodating to distressed borrowers, many stores—even profitable ones—only have the choice of declaring bankruptcy. Affected in all of this are the millions of Americans who rely on retail jobs for their livelihood.With so much data available, the challenge was how to visually explain the complexities of this story. Eleven charts of seven distinct chart types (including a cartogram of small multiple line charts) appear in the final version of this story, each picked as the best/most logical form for the data it represents. The story starts with a simple chart to ease the reader in, becoming more detailed and specific. Using data from the Bureau of Labor Statistics to create the retail landscape choropleth map, we devised our own metric, 'Reliance on Retail' by calculating the difference between retail job growth and overall job growth to show which areas are most susceptible to retail closings.

What was the impact of your project? How did you measure it?

This story became the most-read and shared story on Bloomberg.com for the day it was published and it was cited by numerous news sites reporting on the same subject. While other news outlets just report on the number of stores closing /jobs lost or the effect e-commerce has on physical retail, Bloomberg is the only organization explaining how delinquent loans and debt coming due are the central elements in understanding this story.

Source and methodology

• Bloomberg reporting• ICSC Research Team and PNC Real Estate Research• Trepp• University of Michigan Consumer Sentiment Index• Fitch Ratings• Moody’s Investors Services• Real Capital Analytics• Bureau of Labor Statistics• various company filings

Technologies Used

R (Tidyverse)QGISAdobe Illustratorai2html

Project members

Matt Townsend, Jenny Surane, Emma Orr, Alexandra Stratton, Alex McIntyre, Mathieu Benhamou and Jennifer Prince

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