In this segment of Industry Focus: Consumer Goods, Sarah Priestley is sitting in as host, and she’s joined by Motley Fool contributor Daniel Kline to discuss the reality of what’s actually happening in retail. The two talk about how perception is not always reality and note that although many retailers are struggling, chains such as Dollar General (NYSE:DG) are adding locations at a rapid pace.

The two discuss the (NASDAQ:AMZN) effect and how it’s driving some chains out of business while others are figuring out ways to thrive. In addition, they look at some data showing how overall physical retail sales have grown, at least in Q4, even though the perception may be that they have shrunk.

A full transcript follows the video.

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This video was recorded on April 25, 2017.

Sarah Priestley: Retail spending as a whole, according to the Census Bureau, is up 5% year over year, and up 17% in the last five years. But the conventional wisdom, as you described it in one of your recent articles, is that the retail industry is kind of dead, it’s dying. And there’s a lot of enthusiasm for that, and I’ll play devil’s advocate here for just a minute and go into that. On the surface, there’s a lot of evidence that backs up that point. In the past year or two, we’ve had bankruptcies from [Payless ShoeSource], The Limited, Wet Seal, Gander Mountain, Sports Authority, and recently we’re seeing a lot of news about store closures. Macy’s is closing 100 stores, J.C. Penney over 100, [Sears Holdings] — 78 Kmarts, 26 Sears locations, and they’ve even admitted substantial doubt in their ability to keep the doors open.

Dan Kline:
It’s one of those things where what you see isn’t what’s actually happening. You walk around the mall — we were talking about this upstairs — the mall near me, the lower-grade mall, about a third of it has become the fake edifices where they put a vending machine and a “Coming Soon” sign, and there’s nothing there, because a lot of stores have gone out. RadioShack is one you didn’t mention; they’ve closed 1,000 or 1,100 on their way to complete oblivion, their second bankruptcy. You look and go, “Oh my God, mall retailers are closing.” My Macy’s closed; the Macy’s I could walk to from my house literally closed. And it would seem like that makes sense. The narrative is, the internet is killing physical retailers.

Yeah. The Amazon effect, as people call it.

And I believed it as well. And then I went to the Shoptalk conference. I mention this because this research came from a gentleman named Kasey Lobaugh from Deloitte. What…