BILLIONAIRE investor Mark Cuban has warned that American communities will “die” if policymakers and business owners don’t act to prevent further closures of brick-and-mortar stores.
It comes amid growing concern over the nation’s so-called retail apocalypse, which has seen hundreds of store closures in recent years.
Mark Cuban sat down for an exclusive interview with The U.S. Sun[/caption]
In an exclusive interview with The U.S. Sun, the Shark Tank judge and minority Dallas Mavericks owner said vulnerable people in communities across the country are being impacted by the closure of brick-and-mortar stores.
Calling it “a big problem to solve,” the entrepreneur said all levels of government should work with entrepreneurs to prevent a growing number of food and pharmaceutical deserts.
“If you just say, just let the market take care of it, we see what happens, communities die,” Cuban warned.
“And so we have to be open-minded. The way I look at it personally, there’s a problem to solve.
“The big question is, when it’s the only outlet for produce or food or pharmacy, or medical services, it becomes a question of, are you willing to let that community die? And who’s responsible for making those decisions?”
Cuban warned against a “laissez-faire” approach, arguing that an economic mindset is much more expensive in the long run.
“How do we get a hospital…how do we get a doctor there? I’m not opposed to bringing the government in and saying, you know what? It’s going to be a lot cheaper to bring in a service than to have people who aren’t getting healthcare, who get sicker and then have to be sent to a hospital 40 miles away,” he added.
CLOSING TIME
The calls come amid ongoing public concern for the closure of brick-and-mortar stores across the country.
A number of major retailers are suffering as the sector grapples with changing consumer behavior, the rise of e-commerce, and inflationary pressures sparked by the pandemic.
With a raft of chains, including Walmart, winding back their retail footprint, experts say retailers are in financial strife due to increased borrowing costs and consumers tightening their wallets amid ongoing cost of living pressures.
According to analysis by retail data provider CoreSight, there has been a 24% increase in store closures in 2024 alone.
Amid growing concern over pharmacy deserts, CVS announced it had replaced CEO Karen Lync with company veteran David Joyner and withdrew its 2024 profit forecast amid growing investor pressure.
Earlier in the week the pharmacy giant said it was laying off nearly 3,000 employees, with the company struggling to drive higher profits and better stock performance.
A pharmacy tech in Ohio told USA Today she now had to drive 22 miles to Fort Wayne, Indiana in order to get her monthly prescriptions after the one pharmacy in town closed in Antwerp.
Customers are increasingly frustrated at the state of US pharmacies, with empty shelves, locked up products and long queues.
Satisfaction with brick and mortar pharmacies dropped 10 points in 2024 alone, according to a study by J.D. Power.
Department stores, including Macy’s, are closing about 150 underperforming stores, blaming competition from big box retailers and a shift to online shopping.
Discount retailer Big Lots has also announced the closure of more than 340 of its 1400 shops across the country after it filed for Chapter 11 bankruptcy in September.
Shopping mall space has begun to shrink in two stages, first from 2009 to 2016, and then again during the pandemic.
MARK CUBAN BIO
- Former and current minority owner of the Dallas Mavericks basketball team
- Outgoing judge on Shark Tank
- Investor and entrepreneur
- Backing Vice President Kamala Harris in her presidential bid
Cuban branded the closure of retailers as “creative destruction” and said he believed consumers would always want access to both online and in-store shopping.
In economic theory, creative destruction is the process of innovations replacing existing ones, which can destroy industries, jobs, and companies.
Cuban said shoppers should not worry too much about their favorite stores closing, but seeing communities go without their favorite locations was “a problem.”
“People want to go shopping, they want that tactile experience, and that’s changed. Now people want a combination of both, so you may not get as many physical brick-and-mortar locations, but that doesn’t mean those large companies have to go out of business,” Cuban said.
“You see Walmart, their online business is growing, and maybe their brick and mortar business isn’t growing as quickly, but what matters is how things are happening together.”
But Cuban forecasted new businesses will crop up from the dust of empty retail stores, especially as the Federal Reserve continues to cut interest rates after they were high during the pandemic.
“Now with interest rates so high, landlords are trying to protect themselves even more,” Cuban said.
“I think once we get through high interest rates, you’ll see a lot more creativity in how those spaces are being used, and new types of businesses will pop up.”
COST PLUS
Passionate about solving problems like pharmaceutical deserts, Cuban is investing his time and money into a new venture called Cost Plus Drugs.
Built on the idea that all Americans should have access to safe, affordable medicines even without insurance, the company aims to disrupt the drug industry and reduce the price of everyday medications.
The company works directly with drug manufacturers to bypass middlemen and lower prices.
It also transparently displays what it pays for medicine.
Through his pharmaceutical venture, Cuban said he has seen many small independent pharmacies go out of business, leaving “pharmacy deserts.”
While acknowledging it is a difficult problem to solve, Cuban said business people and local communities could collaborate to solve it.
“I don’t know that there is a quick fix, but it’s something we all have to pay attention to and I think working with entrepreneurs in communities hopefully can lead to a solution.”
