It's suddenly the classic full-scale paradigm shift and no longer just on the margins. The economy is at or near the peak of an admittedly tepid recovery, but from city to city, suburban strip to suburban strip, and particularly in rural areas—empty store space and for-lease signs are omnipresent. It's almost what you would expect to see during a recession. The full spectrum of brands and store types—from discount to luxury across virtually all product categories—are impacted.

In just the past couple of weeks, Payless Shoes goes bankrupt, Sears and K-Mart teeter closer towards collapse, Whole Foods bleeds red ink from overexpansion, and Ralph Lauren closes on Fifth Avenue. Every quarter sends more bad news from the big department store chains, which may be going the quaint way of the Woolworths, faster than any one wants to admit. The rout is on.

Brokers will downplay what's happening—that's part of their job in hustling transactions. But among fund managers with retail portfolios, it's “don't show panic” to clients, although in unguarded moments at least concede “real concern.” Alarms are ringing and assessments are underway on how to pare portfolios and cut anticipated losses. Any investor who expected to notch escalating rent increases on the order of the past few years is instead recalibrating net operating declines as retailers of all stripes consolidate operations to the best locations. And mall owners are running out of ideas for replacing failing anchors when recent alternatives like plugging in familiar discounters and the high-end grocery concepts are subject to their own cutbacks. One recent study talks about converting mall space into more restaurants and food courts. Is this more evidence of running out of concepts? How about bowling alleys and playgrounds next?

The downscaling of bricks and mortar retail also has implications for dulling jobs growth. Sales people, cashiers, stockroom workers all see cutbacks and are not replaced in adequate numbers through advances in various highly efficient, increasingly automated delivery-logistics industries.

The retail scene has become totally caveat emptor.

We are not talking manageable erosion anymore—it's become clear now that the bricks and mortar retail world is in full-scale retreat. The new concepts are no longer in store, they are online, and real estate owners better wake up fast.

As we have commented before, compared to the rest of the world, the US has been grossly over-retailed with store space for decades. Developers morphed product from downtowns to suburban malls, then into Big Box formats, and leisure centers, complementing an array of grocery-anchored strips stretching along thoroughfares in every direction. There was always some new store concept to attract shopper traffic, even when urban retail in older cities and then outlier regional shopping centers failed. Conspicuous consumption and easy credit fueled a splurge in retail spending until the 2008 banking crisis exposed an unsustainable spendthrift culture. Now in the new Era of Less, the US may be near full employment, but jobs pay less and many Americans live without an adequate safety net—little or no savings and the specter of reduced government benefits and higher healthcare costs.

Not only does the average American have less to spend, but he/she also has less time to spend it—holding two jobs, taking care of kids or parents, or looking to stay out of traffic and cut down wherever possible on unnecessary shopping trips. Time is money too.

But the shock now—really since the past Christmas season—is how quickly Amazon and internet shopping are taking market share from retail real estate and will likely continue significant incursions. The internet model works and has been improved to an almost failsafe level of consumer satisfaction for selecting items and fast shipping—we realize we can get many of the things we need and want without leaving our homes, and the selection of items far surpasses anything available traipsing through a mall.

It's suddenly the classic full-scale paradigm shift and no longer just on the margins. The economy is at or near the peak of an admittedly tepid recovery, but from city to city, suburban strip to suburban strip, and particularly in rural areas—empty store space and for-lease signs are omnipresent. It's almost what you would expect to see during a recession. The full spectrum of brands and store types—from discount to luxury across virtually all product categories—are impacted.

In just the past couple of weeks, Payless Shoes goes bankrupt, Sears and K-Mart teeter closer towards collapse, Whole Foods bleeds red ink from overexpansion, and Ralph Lauren closes on Fifth Avenue. Every quarter sends more bad news from the big department store chains, which may be going the quaint way of the Woolworths, faster than any one wants to admit. The rout is on.

Brokers will downplay what's happening—that's part of their job in hustling transactions. But among fund managers with retail portfolios, it's “don't show panic” to clients, although in unguarded moments at least concede “real concern.” Alarms are ringing and assessments are underway on how to pare portfolios and cut anticipated losses. Any investor who expected to notch escalating rent increases on the order of the past few years is instead recalibrating net operating declines as retailers of all stripes consolidate operations to the best locations. And mall owners are running out of ideas for replacing failing anchors when recent alternatives like plugging in familiar discounters and the high-end grocery concepts are subject to their own cutbacks. One recent study talks about converting mall space into more restaurants and food courts. Is this more evidence of running out of concepts? How about bowling alleys and playgrounds next?

The downscaling of bricks and mortar retail also has implications for dulling jobs growth. Sales people, cashiers, stockroom workers all see cutbacks and are not replaced in adequate numbers through advances in various highly efficient, increasingly automated delivery-logistics industries.

The retail scene has become totally caveat emptor.