CNNMoney.com has an article today about the trend among major retailers to close stores and scale back store openings this year. Although short on hard data, the implication that online sales are starting to impact store operating decisions is not surprising. Even if online sales are only in the single digits as a percentage of overall retail sales, the rapid upward trend is bound to have an impact on strategic planning. Stores cost a fortune to open, and with utility and labor costs going up, the Internet and direct marketing efforts in general are bound to draw some attention away from the traditional strategies.

"There's nineteen-and-a-half square foot of retail space for every shopper in this country. That's a lot," Davidowitz said. "Is it natural for companies to keep expanding when the market is already overcrowded with stores, especially when there are numerous projections calling for a slowdown in consumer spending?"

He also blamed online retail sales, which he said are growing about 20 percent a year. "That's a huge increase," said Davidowitz. "Don't you think it's going to eventually have some negative impact on traditional retailing?"

Market research firm ComScore Networks estimates that total online sales, including travel, reached $143.2 billion in 2005, up 22 percent over the previous year.

Jay McIntosh, director of retail and consumer products with Ernst & Young, agreed with Davidowitz.

"Is online retailing stealing market share away from brick-and-mortar stores? Absolutely," said McIntosh. He added, "Online retailing as a group is the second largest retailer after Wal-Mart in terms of annual sales."

To compete, especially on costs, some retailers will need to become leaner, said McIntosh.