J.C. Penney ($JCP) filed for bankruptcy earlier this month, after struggling to make debt payments with annual sales continually falling since 2016, unable to weather the Coronavirus pandemic and looming retail apocalypse. With hundreds of stores across America, the 118-year-old company is leaving behind a sprawling retail footprint. And some companies are ready to pick up where JCP left off.
Our map shows a concentration of JCP locations in rural areas and throughout the East Coast. On average, there are .34 Walmarts ($WMT) within 5 miles of every JCP location. There are .09 walmarts within every mile of a JCP. But in small towns, there are plenty of Walmarts to make up for JCP shutdowns.
For places like Cheektowaga, New York; Rockwall, Texas; St Cloud, Minneasota; and Greendale, Wisconsin, there are two Walmart locations for every J.C. Penney. And it’s likely that the people who live in these towns and cities are Walmart loyalists already. Walmart’s low price point puts them ahead of JCP in consumers’ minds. The median income for a household in Cheektowaga is $38,121.
Even in major cities, there are as many Walmarts as J.C. Penney locations within 0.5 miles. Walmart is one of the few retailers thriving during the pandemic. In the company’s recent earnings call, it reported e-commerce sales growing by 74%, while same-store sales rose by 10% in the first quarter.
Other shoppers will be absorbed into Target’s ($TGT) 1,868-store strong empire. Target is another one of the few major companies able to benefit from the global crisis. The retailer’s e-commerce sales grew by 141% in the first quarter, comparable sales rose 10.8%, and the average basket total jumped 12.5% with people making fewer shopping trips but stocking up on more items.
And then there’s Macy’s ($M). The department store has started reopening store locations and has succeeded in raising money to help repay outstanding amounts under its revolving credit facility. On average, there are 0.35 Macy’s locations within 1 mile of each JCP location.
While we can’t anticipate how brand loyalists’ consumption habits will change once J.C. Penney shuts down, they’ll have plenty of opportunities to warm up to a new favorite retailer. For some, the choice will be clear, as Walmart has made a point of opening up shop in areas once served by JCP.