More Big-Box Retailers Bite the Dust: What’s to Blame? (Besides Online Shopping)

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RoomStore Sports Chalet Phoenix - Big-Box Retailers - Eminent SEO

A Sports Chalet and The RoomStore are situated next to each other in north Phoenix, and both franchises are in the process of going out of business for good. (Eminent SEO Photo)

It’s always sad to see a business close its doors and leave behind a vacant storefront.

Well, almost always – depending on if the shuttered business personally wronged you in any way.

Over the last couple of months, multiple big-box retailers with a once-prominent presence here in Arizona announced they would be closing all of their locations. The notable closures include Southwest-based sporting goods franchise Sport Chalet and the Arizona-only furniture chain The RoomStore.

So, what caused the demise of these long-standing retailers?

Was it online shopping (ecommerce) options? Too many direct competitors? Failure to distinguish themselves from similar franchises? An economy that simply refuses to kick into the next gear?

It’s likely all of the above, plus another, less-talked-about factor I’ll examine a little bit later. First, let’s look at the particulars of these franchises’ final days, as well as some of the main influences that put them out of business.

Details on The RoomStore’s Closing

The RoomStore is currently having one of the more spectacular going-out-of-business bonanzas I’ve ever seen. Around the metro-Phoenix area, shopping center signs and cargo trucks have unabashedly been heavy on terms like “Liquidation” and “Going Out Of Business Forever.”

RoomStore Liquidation Truck - Eminent SEO

A semi-truck parked near The RoomStore in north Phoenix advertises the furniture retailer’s going-out-of-business sale. (Eminent SEO Photo)

The company’s website impresses the sense of urgency even further, encouraging you to negotiate the price you want and that nobody beats The RoomStore’s going-out-of-business sale.

RoomStore Going Out Of Business Sale

Um, are they excited to be going out of commission? The company even appears elated to point out that several locations have closed and the rest are shutting down soon.

RoomStore Homepage Locations Listings

The Room Store was actually founded in Texas in 1992, and it opened its first Arizona location a year later. When all of the Texas RoomStores began closing down in late-2012, the Arizona locations were immune, since they were owned by a separate company: The RoomStores of Phoenix, LLC.

At its height, The RoomStore owned 12 locations in Arizona, primarily in the greater Phoenix region. The company was perhaps most recognized locally as a long-time sponsor of the Phoenix Suns.


When The RoomStore filed for bankruptcy protection last December, it was a definitive sign that the local furniture empire was on its last legs.

Details of Sport Chalet’s Closing

Sport Chalet’s wind-down process has been much more somber. In April, the company sent an email to all of its subscribers announcing the end of the franchise. A version of that email is currently on the homepage of the website, which appears to be the only page on the site anymore.

Sport Chalet Homepage Closing

You can’t even find which stores are still open through the website. The company has sent several follow-up, matter-of-fact emails that announce extensions of honoring customers’ gift cards and other similar notices. The retailer doesn’t appear to have any sense of urgency in enticing the consumer to visit a store and buy an item on discount before the place closes.

Founded in 1959, Sport Chalet at one point had more than 50 locations in Nevada, Arizona, Utah and, especially, California, where it was headquartered. The sporting goods chain is part of the Vestis Retail Group, which also owns Eastern Mountain Sports (EMS) and Bob’s Stores, all located in the Northeast. Vestis has filed for bankruptcy, but it is keeping most of its EMS and Bob’s Stores open while cutting out the fat that is Sports Chalet.

Too Much Competition for These Big-Box Retailers?

The RoomStore and Sport Chalet were both plagued by lukewarm and negative online reviews. For The RoomStore, complaints mostly concerned returns, refunds, sales tactics and even deliveries and the quality of furniture. For Sport Chalet, sky-high prices and poor customer service appeared to hamper the business most forcefully.

As a significant side note, if you’re going to survive as a brick-and-mortar store in today’s environment, you’ve got to offer an experience, not just lay out merchandise and hope somebody buys it. If you want to look within The RoomStore’s industry, it’s easy to see that the home furnishings giant IKEA offers a distinct shopping experience. Did The RoomStore offer a discernible experience, or did it simply (haphazardly) sling furniture?

If you’re looking at Sport Chalet’s industry, you can see that Dick’s Sporting Goods at least somewhat offers an experience, as each store maintains a locker room feel. Did Sport Chalet offer an experience? Do large photographs on the walls of various sporting activities make for an experience? The franchise initially started out with a focus on skiing equipment and later expanded to scuba gear, but after that, it tried to appeal to a wider audience, and it ended up throwing aside its unique selling proposition in the process.

Also, Sport Chalet wasn’t on its email and ecommerce game the way that Dick’s is. Personally, I was buying online from Dick’s Sporting Goods way back in the early 2000s. Lo and behold, several physical locations started cropping up around town just a couple of years later.

It’s obvious that Dick’s has a two-fold strategy to grow its business. Even if Sport Chalet’s ecommerce sales were vibrant, they weren’t enough to salvage the entire company, and apparently not even worth keeping as an online-only business.

Also of note is that Sports Authority recently filed for bankruptcy and later announced it is closing all of its stores. Same concept here: What was the Sports Authority Experience? Anybody? Bueller? Sports Authority was once the country’s largest sporting goods retailer, but like Sport Chalet, it will soon be no more.

What do these major setbacks mean for the great American sporting goods store going forward?

Did a Sluggish Economy Kill These Franchises?

Well, even if the economy is hurting – which it no longer seems to be, by most indicators – the furniture and sporting goods industries aren’t currently feeling the pain. Here are a few stats that tell the tale, as provided by the U.S. Census Bureau:

  • Retail and food service sales are up 3.5 percent in Quarter 1 of 2016 from the same time period last year.
  • Furniture and home furnishings store sales are up 5.6 percent in Q1 of 2016 compared to the same period last year.
  • Sporting goods, hobby, book and music store sales are up 7.4 percent, one of the largest jumps in any retail and food service niche from Q1 2015 to Q1 2016.

So, even if retail is up this year and the furniture and sporting goods sectors are particularly doing well, those factors apparently weren’t enough to save franchises like The RoomStore, Sport Chalet and Sports Authority. You would think that even a higher-priced store like Sport Chalet, for example, would be able to survive as long as the economy’s in good shape and there’s enough consumer spending to go around, but alas, some businesses are still going under.

Truth be told, these franchises were hemorrhaging profits for years prior to the economy righting itself, but by the time it got better, it was too little, too late – and the writing was on the wall for these once-prominent retailers.

Did Ecommerce Sales Play a Role?

It’s always the elephant in the room every time a big-box retailer goes under: internet sales. Yes, online sales are becoming more and more common as the checkout process continually gets easier, but ecommerce still doesn’t take up as big of a chunk of the market as you’d think.

According to the chart below, ecommerce sales comprised only about 2.5 percent of all U.S. retail sales (adjusted) back in Q1 of 2006. The market share has continuously grown since then, rising to nearly 8 percent of all retail sales in Q1 of 2016.

Yes, 8 percent doesn’t really seem like that much, but that still represents more than $92 billion in transactions in just one quarter of the year. It’s decisively large enough to play a role in putting brick-and-mortars out of business.

Overlooked Factor: Reluctance of Dealing with Sales Associates

Although online shopping is more convenient than ever, I think the issue goes much deeper when it comes to why big-box retailers are hurting. When shopping online, you can line up dozens of items side by side, check out their specs and then make your purchase with one or two clicks of a button, all without having to deal with a salesperson.

While it’s hard to beat physically trying out an item in the store, some might still say, “Why deal with a potentially incompetent, unhelpful or pushy sales associate when I can just buy the merchandise online.”

To some shoppers, it might be a diagnosable social anxiety disorder that keeps them buying their furniture, clothing and other merchandise from a distance. To others, it might be a conscious decision to avoid the hassle and wait that is latent every time you walk into a store – especially one like The RoomStore or Sport Chalet, according to many online reviews.

Many people spend more time with their face buried in their phones or computers than they do interacting with others face to face, so it’s no wonder ecommerce continues to grow. You could argue we’re being conditioned to do more interaction online than we do in “the real world.”

According to a 2015 eMarketer forecast, Americans spent an average of 2 hours and 54 minutes each day on their mobile devices last year, and that doesn’t even count phone calls. That number equates to 44 days out of the year just spent on a mobile phone or tablet. The 2016 average is expected to jump to 3 hours and 8 minutes per day – again, not counting using a phone the old-fashioned way.

Learn More About Internet Addiction

While some can juggle face-to-face interaction and heavy internet usage well, others cannot. If those who struggle with it are able to simply buy merchandise remotely, even if it means the item’s size or color might be askew once seeing it in person, then that’s a risk they’re willing to take. And let’s be honest, you can find some great deals online. Also, the online checkout process is usually easy and you’ll save gas by not having to drive to a store.

It all adds up to a significant threat to big-box retailers, which need to make sure their online sales process is as good or better than their in-store operations.

Conclusion

So, ecommerce sales, stiff competition and possibly the economy are all going to weigh heavily on brick-and-mortar retailers going forward, but I also think we shouldn’t discount the ever-increasing reluctance to social interaction. If someone can buy the same item online that they would otherwise have to walk into a store and deal with sales associates, especially a place that’s not known for its customer service, how can you convince them to buy from you on location?

We’d be interested in hearing your thoughts on why big-box retailers are going under as well as your ideas to keep them afloat. Comment with your opinions below.

Oh, and R.I.P. Sport Chalet, Sports Authority and The RoomStore.

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6 thoughts on “More Big-Box Retailers Bite the Dust: What’s to Blame? (Besides Online Shopping)

  1. Avatar for Team Eminent SEOTatiana Anderson

    I truly believe that online/ecommerce is where it is at. People are becoming more and more closed off in regards to interaction with others. It’s sad to see big businesses going out of business like this but new competition comes everyday. Personally I love shopping on Amazon as you can get a cheaper deal than the actual store price. Would this also be the cause of bigger business shutting down?

    Reply
    1. Avatar for Team Eminent SEOAndrew Gilstrap

      Yes, it’s often quite easy to find a better online price than you’d get in store. Combine that with the ease of shopping from your computer chair, couch, etc. and these brick-and-mortar stores have a problem on their hands. I’ve been buying stuff from Amazon for well over a decade, but it doesn’t mean I want all physical stores to go the way of the dinosaur. I hope they both can coexist going forward. Thanks for your input!

      Reply
  2. Avatar for Team Eminent SEOStephanie Samson

    I don’t think online shopping plays a big part, for me at least. I personally hate online shopping, I’m an impulsive shopper so I don’t want to wait for something to be shipped. When I can go to a store, try it out, and take it home all in the same day I see no reason to order something online. Experience is a big part for me; a stores ambiance, customer service, and even organization makes for a great store in my opinion.

    Reply
    1. Avatar for Team Eminent SEOAndrew Gilstrap

      Trying out an item in store is definitely second-to-none. There are few things as depressing as seeing a large, once-vibrant store just sitting there vacant, taking up space. I hope other stores can stay in business for years to come, but they’re going to have to be creative to not get pushed out of the market. Like we both said, they’ve got to offer an experience different from their competitors. Thanks for sharing your insight!

      Reply
  3. Avatar for Team Eminent SEOSteven Russo

    Its crazy to think that the RoomStore is closing even with the backing of the Suns, but I can understand how people don’t want to pay high interest on a couch or furniture. These sports store closing isn’t a surprise honestly, with Dick’s Sporting goods being a giant and having more items and brand available it just makes the other stores not needed. I went to a Sports Authority a few months ago during the day on the weekend and they had 10-12 employees working and maybe 3-4 customers in the 1hr I was there. Everytime I go do Dicks they are packed and have better deals and prices.

    Not gonna stop me from going to the RoomStore today and see if I can get a couch for a steal 🙂

    Great article Andrew!

    Reply
    1. Avatar for Team Eminent SEOAndrew Gilstrap

      Thanks for your comment, Steve, and your anecdote on Sports Authority. All of the ones around me have been closed down for months, so I didn’t know Sports Authority was still a thing until I had already started writing this piece and did some more digging. Apparently, there are still a few on the east side of the Valley, but not for much longer. As far as The RoomStore, you’d better get there soon, as I believe they’re all shutting down after Memorial Day weekend.

      Reply

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