Experts say online sales could have played role in store closures

Experts say online sales could have played role in store closures

TYLER, TX (KLTV) - The recent closure of dozens of Macy's stores nationwide, including one in East Texas, has brought up questions about the strength of in-store shopping. Some experts say online sales are playing a role in the physical stores themselves having to close.

Sixty-eight Macy's stores have closed their doors this week, including the location in Tyler. Tyler Economic Development Council President and CEO Tom Mullins said the problems lie within the store or company itself.

"If you're struggling in the Tyler market there's some major concerns, because this is such a strong retail area," Mullins says.

Read More: Macy's closing 68 stores, including Tyler location

Some experts say part of the problem is the tendency of shoppers to skip the trip to the store, and browse for items online instead.

"Certainly it's had a huge impact, because with so much merchandise being sold online, that undermines the value proposition of the retail store so you're paying a tremendous amount of money for all that square footage if in some sense you're kind of a showroom," LeTourneau University Professor John Barrett said.

Barrett said while people may still go into stores on occasion to check out items they have seen online, the tendency is still for people to purchase through a website.

He said websites like Amazon can also play a role in stores being forced to close.

"There's a lot more options in the sense that you don't have to necessarily go in and just buy something at a retail store because you can't find it anywhere else," Barrett said.

And it's not just stores affected by online sales, but cities too, since there is no sales tax charged for online purchases. Smith County's sales tax revenue has decreased slightly since 2015.

However, Mullins is confident in Tyler's strength as a retail center, and believes as the oil and gas industry continues to improve so will the sales tax revenue.

"I think Tyler will continue to attract new companies, and those spaces will probably have new prospects looking at them. There's always going to be what we call economic churning: companies going, companies leaving, old companies closing, new companies starting, so it's not unusual," Mullins said.

This Macy's location employed 65 people. Mullins says since the city of Tyler has a 4% unemployment rate and a number of help wanted signs posted for different businesses, he thinks those employees should be able to find other jobs throughout the city.

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