Former Walmart CEO says coronavirus will challenge department stores
'We are in the midst of a retail transition,' Bill Simon says
One-stop shops will perform well but department stores will be challenged by the coronavirus pandemic, former Walmart CEO Bill Simon argued Tuesday.
In-person shopping was down by at least 50% compared to last year, which Simon said was not surprising due to the pandemic but said the "magnitude" was surprising.
"We are in the midst of a retail transition," Simon told FOX Business' Maria Bartiromo on "Mornings with Maria." "They happen periodically. We went from Main Street to malls to big box, and now we're transitioning to digital or some form of digital, and it's been interesting to watch and be a part of."
Simon added that while the pandemic has "clearly" accelerated the shift towards digital, "there will be a place for physical retail."
"Even the largest, highest projections of digital sales are in the low 20%. That means 75-80% will stay brick and mortar," he explained.
Simon went on to say that the landscape would become "more difficult" for brick-and-mortar retailers to survive.
"You're going to have to be digitally engaged or omnichannel in order to be successful. You're going to have to have a unique position or selling proposition, that you have to be special," he said.
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While "department stores are going to be challenged," he added, it will not be the demise of physical retail.
Simon believes one-stop shopping centers, like Walmart, Costco, and Target, will do well because most people are getting their food in a physical store.