How Much Retail Space Is Too Much?

Returning from trips to the United States, many of my fellow Europeans marvel at what they saw across the Atlantic: the streets of New York, the beaches of California, the blinking lights of Las Vegas and the stunning nature all across the nation.

What also fascinates most returning visitors, are the huge shopping malls with their endless opportunities to buy whatever you might need (or want for that matter). Looking at the chart below, it becomes clear that the latter is not owed to a holiday-induced shopping frenzy, but an accurate perception. According to Credit Suisse, the United States has more retail space than any other country in the world. With more than 21,500 ft² (2,000 m²) per 1,000 people, the U.S. leads similarly developed nations by a wide margin, not to speak of emerging markets.

But how much is too much? Several U.S. retail chains from Macy’s to American Apparel have recently announced the closure of stores, indicating an unhealthy degree of oversaturation with retail space.