The U.S. retail industry appears to stand to lose 11% to 17% of its total store count by 2025.
A report sent to UBS clients last week predicts that in the next five years 100,000 retail stores will close nationwide and that e-commerce's penetration will rise to 25%, from 15% last year.
The number of closed stores could rise as high as 150,000.
The winners in this scenario are expected to be big companies with sophisticated online operations and logistics networks, including Walmart, Target and Amazon, which are poised to sop up the market share left behind by other retailers going dark.
The crisis has been a boon to Amazon, Walmart and other large players who are able to operate as essential businesses selling groceries and other basic staples.
Consumers' embrace of online retail is a long-standing trend but has been accelerated by the spread of COVID-19, which has led to stay-at-home orders to curb its spread that have halted nonessential business.
Abby Corbett, a managing director and senior economist for CoStar Analytics concurred that the virus had sped up adoption of online shopping, and added that it drastically shortened the runway for traditional retailers attempting to adapt to the new order.
The main concern is helping tenants and landlords find a way to survive in the immediate future. Rent forgiveness or deferral only solves part of the problem. Tenants need to somehow hold onto their workforce and suppliers, in addition to their physical space.
No subcategory of retail is expected to be unaffected, according to UBS' baseline predictions, though some will fare better than others.
The losses will be most pronounced in the apparel and accessories sector, which could lose about 24,000 locations; the consumer electronics sector, which may lose around 12,500; and the home furnishings sector, which could see around 11,300 locations go dark.
UBS anticipates the shuttering of around 100 regional shopping centers as well.
The retailers who are expected to see the least impact are home improvement stores, which could lose just under 3,600 locations, and auto parts stores, which are predicted to lose 600.