ANALYSIS

One of the big lessons the US retail industry has learned from its recent recession, and what Australia will have to learn from its own downturn, is that many of its stores are too big. The evidence of this fact is abundant, in the form of a familiar and unwelcome retail concept called the zombie store.

A zombie store is born when the clearance sales are winding up and a retailer, predicting continuing weak demand for its merchandise, orders substantially less new inventory than it would have in the past. It normally also cuts staffing back to the bone to align personnel with expected sales activity.

The consequences are well known. The customer enters the store and there is a hush inside, and a low energy level. If the store is a large one, there is likely to be an inordinate amount of empty space because inventory has been “controlled” so much that some racks and other display fixtures have been taken away.

The shelves that remain may have bare spaces, and where the space is actually occupied there may only be a few picked-over items. Clothing racks, if it's a clothing store, may be half-empty and only have one or two sizes or colours for each item.