If there's one thing bricks-and-mortar retailers might love to see return, it's consumers willing to pay full price. They shouldn't hold their breath.
Americans have become increasingly price-sensitive and unwilling to pay full price in stores, thanks to a combination of stagnant wages and lower prices from online retailers such as Amazon.com (AMZN). That's taking a toll on traditional retailers. So far in 2017, 10 retailers have filed for bankruptcy, including shoe chain Payless and women's apparel vendor Limited Stores -- that's just a few less than went bust in all of 2016.
And they're unlikely to be the last, according to a new analysis from S&P Global Market Intelligence, which ran the numbers and identified another 10 retailers at risk of folding within the next year. One company on their list, Bebe Stores (BEBE), said Friday it would close all of its more than 160 locations.
"General merchandise stores and apparel retail are feeling the threat from convenience provided by online retailers," Camilla Yanushevsky, senior analyst, S&P Global Market Intelligence, wrote in an email. "Bankruptcies will likely continue in 2018 and beyond. Retailers that fail to adjust to changing consumer preferences will be the most at risk."
General merchandise stores and clothing retailers are at most risk as a group. The irony is that bricks-and-mortar retailers are failing at a time when U.S. clothing sales are on the rise. Even though clothing sales rose 3 percent to $218.7 billion last year, department stores and national mall-based chains saw a drop of 4 percent.
By contrast, grocery stores appear to be relatively immune to the threat to online stores, Yanushevsky said. "There exists a human tendency to need to touch and feel food before consumption."
Two other categories that are on "a more positive course" are home improvement and online retail, according to Jim Elder, director of risk services at S&P Global Market Intelligence. He said that's likely due to the shift to online retailing, as well as the strong housing market.
Read on to learn about the 10 companies S&P says are in greatest danger of going bust within the next year.