Amazon means massive consolidation for the entire retail industry: Fmr. Toys 'R' Us CEO
With Christmas quickly approaching the holiday shopping season is in high gear, and analysts are predicting a boost in consumers’ spending this holiday season compared to last year.
Commenting on the shopping season, Former Toys “R” Us CEO Gerald Storch told FOX Business Network’s Dagen McDowell, “They’re off to a very strong start. We have real commerce data from November and it’s some of the best data in years with sales up 5.8% year-over-year which is really, really good and the data for the first part of December looks good too.”
Despite the overall boost to the retail sector from the holiday season, Storch predicts a consolidation of the retail sector due to the ‘Amazon effect’ (NASDAQ:AMZN).
“There’s no doubt in my mind that Amazon and the internet as a whole means massive consolidation and restructuring for the entire retail industry.”
According to Storch, Amazon is continuing to expand its share of the market.
“Amazon continues to grow 20% year-over-year-over-year gobbling up market share.”
Storch says despite bricks-and-mortar beginning to make the transition to ecommerce, the lower profits from the internet are having an impact on the industry.
“Retailers, you know, brick-and-mortar retailers are doing great on the internet too, but it’s a less profitable business than the business in the stores which is what’s forcing so much restructuring and consolidation.”
