Kevin Johnson minced no words when he kicked off his first quarterly results presentation as the chief executive of Starbucks. Traditional brick-and-mortar retailers are facing dire prospects.
He specifically referenced a recent Wall Street Journal story that said through April 6, physical store closures have been announced for 2,880 locations this year and the pace looks poised to exceed the closings that were notched during the Great Recession.
“The article illuminated once again the seismic shift in consumer behavior underway and the devastating impact that this sea change in behavior is having on many traditional brick and mortar retailers,” Johnson told analysts during a presentation. He isn’t the only CEO is the sector raising major concerns about the state of retail. Earlier this year, Nike (nke, +0.56%) CEO Mark Parker said the retail landscape is “not in a steady state” as consumers spend more online and make fewer visits to brick-and-mortar stores. And last month, Urban Outfitters CEO likened the bloated square footage to the housing bubble.
While Starbucks (sbux, -4.89%) and restaurant chains would at first glance appear to be immune from the consumer-driven shift toward e-commerce spending for electronics, apparel, cleaning products, and other consumer goods, they are suffering from that shift in behavior as well. People visit malls less frequently than they did in years past, and chains like Starbucks have hundreds of locations in malls. More Americans work from home—and eat there too.
“The retail industry is going through a disruption right before our eyes,” Johnson said.
It is amid this backdrop that Starbucks reported fiscal second-quarter sales figures that disappointed investors, sending shares down about 5% in after-hours trading on Thursday. For the 13-week…