Kansas City, MO

Why Are Department Stores Leaving Kansas City?

Evan Crosby

Kansas City, MO. - From Michael Kors, to Nike, to Victoria's Secret, department stores continue to close in the Country Club Plaza, over the past year.

However, it isn't just the city's famed shopping district that continues to lose retailers -- often national chains. A number of department stores have been closing across the Kansas City area. Many of these now-shuttered stores were once major tenants for shopping centers and malls around the metro.

So, why do department stores continue to close their doors in Kansas City? As this article points out, this retail phenomenon is really something that's going on everywhere.

1. The growth of shopping online

The growth of eCommerce has probably brought about the most significant changes to the retail industry, which is often referred to as the Amazon Effect.

And retailers in the Kansas City area are dealing with these same profound changes.

According to Investopedia, as more consumers shop online, fewer consumers are shopping in stores, especially the big department stores, including the ones in shopping malls. The loss of revenue has forced tens of thousands of stores to go out of business nationwide.

Unfortunately, for many of Kansas City's department stores, as online shopping continues to become more popular with shoppers, it will be even harder for them to compete and stay in business.

In fact, Sears was unable to compete and eventually was forced into bankruptcy and eventually closed its last traditional store in Kansas City back in 2019.

JCPenny has been closing stores in the metro over the past few years. And there is only one remaining Macy's left in Kansas City.

2. The rise of discount retailers

It isn't just online shopping that's hurting department stores locally and nationwide.

When bargain-hunting consumers do shop in stores, they often shop at discount retailers like TJ Maxx and Ross. And the Kansas City area continues to see a growing number of discount stores opening.

Why have discount retailers become so popular?

Because they are often able to sell the same name brand clothing found in department stores for less money. How are they able to do that?

According to Business Insider, discount retailers have less overhead than department stores, so they can pass the savings onto their customers.

3. The fact that younger shoppers tend to avoid department stores

According to Quartz, young people aren't hanging out in malls like previous generations did when they were young. That means a lot of young people aren't shopping and spending their money in department stores.

And that national trend seems to be holding up in Kansas City as well.

Since department stores struggle to attract younger shoppers, it has become much tougher for them to stay in business.

4. Big stores cost more to run

As mentioned, large department stores tend to have a lot of overhead, which makes them expensive businesses to operate. And since these stores are no longer getting the amount of shoppers that they once did, it makes them less profitable.

That's why many anchor stores in the Country Club Plaza, as well as in shopping centers across the Kansas City metro continue to close their doors.

5. Dead inventory cuts into profitability

When a retailer can't sell all of its inventory, the unsold merchandise is referred to as dead inventory.

How do department stores eventually get rid of all the inventory that they can't sell? Oftentimes, they have no choice but to slash prices in order to entice shoppers to buy their remaining merchandise. The downside of cutting prices is that retailers end up making less money, and sometimes even taking big losses.

After a while, those losses pile up, until a store, like Sears, goes bankrupt.

6. Increase in Budget-Minded Shoppers

According to a story on retail from PR Newswire, an increasing number of shoppers are becoming more motivated to find savings when they shop. That means even older shoppers who traditionally shopped at department stores in Kansas City are abandoning them for more affordable options like discount retailers and e-commerce sites.

In short, the phenomenon of department stores closing their doors in Kansas City is not a local one. Instead, it's part of a national and even global trend that's created a lot of upheaval for traditional retailers, especially department stores.

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Freelance business and finance writer, and author of "100 Money Lessons in 100 Words."

Kansas City, MO

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