The massive US bubble that no one talks about

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The US has a massive oversupply of retail floor space.

The US has 23 sq feet per capita of retail space (but as much as 46.6 sq feet). It’s difficult to come by reliable numbers, but that compares to 14 sq feet in Canada, 6.5 sq feet in Australia, 2.3 sq feet in France and 1.1 sq feet in Italy.

It’s no coincidence that the spike in retail floor space coincided with the rise of cheap imports. The US has embraced globalization more than anywhere else.

The retail pharmacy business perfectly illustrates the change.

A pharmacy used to be a little shop that dispensed prescriptions. They have grown to 20,000 sq foot (1900 sq m) stores where you can get anything.

Conventional wisdom says get people into the store and you can sell them anything but there is more to it. It’s about margins. Cheap Chinese goods have made retail margins incredibly attractive.

Goods that once cost $4 to manufacture and sold for $10 now cost $0.50 to manufacture and still selling for $10. The rise in retail square footage has been all about ripping off consumers who have been slow to adjust.

This is part one of a series. In part two I will talk about how the coming years will be payback time and the enormous ramifications for the economy.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.


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Adam Button


  1. But it doesn’t matter because corps have bent the tax code so that vacant space is a tax deduction. Same for rental housing. And they get to depreciate property that is depreciationg. Crony capitalism at work. And of course this tax trick will not be removed.

  2. There is definitely a story to be written on the tax side. I think there will continue to be pressure on politicians to bail out ‘job creating small business owners’ who massively overbuilt.

  3. Adam,

    thaks for this. how informative. When if the next set coming? I won’t want to miss it.

  4. I don’t like to set deadlines for myself but I’ll write it up tomorrow afternoon around the same time unless something comes up.

  5. Can you buy a gun and ammunition in that big pharmacies if they have all?

  6. Adam, I hope you are going to mention how Amazon is going to gobble them all up:

  7. Adam, I came upon this article as I was looking into the role of parking in retail success. Stats on parking in the US indicate that the area consumed by parking spaces is equivalent of the land mass of Puerto Rico. That makes me wonder whether the stats you cite for retail also encompass parking, contributing to the huge differential with other countries.


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