Three Retailers Left In America? C’mon Jim Cramer, Get Real

Maybe he was trying to make a joke, but to many of America’s stronger and very much surviving retailers there was nothing funny in Jim Cramer’s prediction that there could be only three retailers left in business if the pandemic crisis is lengthy.

Speaking on CNBC at mid-day Friday, the Mad Money maven said that only Amazon, Walmart and Costco would be left after the coronavirus-driven collapse of the retailing economy. “Can you imagine what it means for this country to just have three retailers?” he said.

Cramer is of course nothing it not prone to making headlines by being provocative but this statement would seemingly fly in the face of what is actually happening at retail now. As such, it would come as a great shock to many of the nation’s retailers – from Kroger to Target to CVS to Walgreen to the dollar stores – that are enduring (if not thriving) right now as they focus on household essentials like food, drugs, paper goods and basics.

To be sure, this unprecedented period in the country is going to claim any number of victims in the business of retailing. For marginal companies that have been hanging on for dear life for years, this may very well be the last straw. They have little capital reserves and being closed for a period that will be a minimum of two to three weeks and could stretch into months will push many into insolvency. Some may try to reorganize but others will go straight to liquidation.

But American retailing has very much turned into a world of haves and have-nots and those that fall into the first category will live to see another shopping day when this is all over. Besides supermarket chains, drug chains and dollar stores, retailers like Home Depot and Lowes, those servicing the automotive business like Auto Zone and those in the off-price channel like the TJX brands, Ross and Burlington all will come out of this, maybe bruised and a little battered but ready to deal with the pent-up consumer demand to buy. In fact the latter group stands to have a field day as overloaded supply chains create incredible buying opportunities. Both these retailers and the customers who shop there will see amazing bargains.

Cramer’s statement doesn’t even account for competitors like Target and Sam’s that are rolling with the COVID-19 punches nearly as well as Walmart and Costco.

Cramer said in the interview that being left with three stores “is something that the government cannot afford to have happen.” Fortunately consumers will make sure first that it won’t.