not going to be pleased with the outcome of this case, while their landlords will be tickled pink. The message is: If you’re going into a shopping centre and you don’t plan to honour the terms of your lease, then be prepared for the possibility that your landlord will dig its heels in. But from the landlord’s standpoint, there is a darker side to the Teavana affair. It’s that in the past they have not been too fussed about getting high-quality space back when a retailer decides to close stores. Large-scale closures have become  commonplace in recent years and at the better shopping centres, there has usually been a waiting list to fill the vacancies. This time, the options to fill the space weren’t attractive enough for Simon to allow Teavana an early exit. So is ecommerce finally starting to bite even at the better regional shopping centres? And if so, where are the soft spots in the tenant mix that landlords and retailers will need to patch up in the next few years? US vs UK To examine this issue in more detail, I have drawn upon detailed data compiled by Fung Global Retail & Technology, which tracks store openings and closings in both the US and UK (see pictured). The US and UK are good leading indicators for Australia, since e-commerce is in a more advanced stage there and is taking a significantly greater retail market share. Where they have gone, Australia is likely to follow in a few years. In the US, store closure announcements through December 8, 2017 increased by 224 per cent on a year-over-year basis, to 6,885 closings. Store openings have also risen during the comparable period, by 50 per cent to 3,433. Meanwhile, in the UK, store closings decreased by 10 per cent in 2017 to 921, while store openings increased 59 per cent to 887. The increase in store openings in both countries is very good news. The much greater increase in closings compared with openings in the US is not. Small wonder that landords like Simon Property Group want to stop the bleeding. In which categories are we seeing softness and strength? The two charts show who the main culprits are for store closings in both countries in 2017. In the US, apparel and footwear accounted for 3,085 closings, or 45 per cent of the total. Electronics accounted for another 1,950 closings, or 28 per cent of the total. One electronics retailer – RadioShack – closed 1,470 stores. The department store/discount department store sector was also mauled, with another 726 closings. And two kids’ retailers – Gymboree and The Children’s Place – closed 436 stores between them. The store openings are concentrated mostly in different categories to those that closed. The discount variety store sector added 2,035 and the food category added 500, thanks to massive expansion by Aldi and Lidl. Off-price retailers TJX and Ross added 230 units and beauty retailers Ulta and Sephora added 170. Rounding out the major contributors was the apparel sector, which added 184 new stores, meaning that, net of openings, apparel lost 1,967 stores. In the UK there were some parallels to the US experience, most notably the 44 per cent of store closures occurring in the apparel and footwear categories. And on the store openings side, food was a big contributor with 336 openings announcements. However, unlike in the US where apparel store openings hardly made a dent in the huge number of closings, the UK saw 209 openings compared with 288 closings. The impact of online E-commerce is clearly having a material impact on both the net growth of the total store base in both countries, with closings far exceeding openings in the US particularly. One of the other noticeable effects of e-commerce is the shift away from apparel and footwear, which includes both specialty stores and department stores. Electronics stores also, predictably, have been a major casualty of the digital revolution. Among the positives is the increasing popularity of off-price retailers such as TJ Maxx and Ross, which are adding back some floorspace in the apparel and home categories. The discount variety and food sectors are also still in expansion mode. As many landlords claim, it’s true that while stores are closing because of ecommerce, there are stores opening too. The issue is that at least for now, there is a discernible imbalance in favour of closings, and the categories are shifting. Both of these factors will confront the Australian industry with increasing severity over the next few years. Michael Baker is a Sydney-based retail consultant and former head of research at the International Council of Shopping Centers. michael@mbaker-retail.com