Amazon did not reinvent the wheel with Whole Foods purchase

Brendan McDermid | Reuters

Apples are displayed at a Whole Foods store in New York City, August 28, 2017.

Known for seeking out and investing in diamonds in the rough, Zell described the real estate side of the retail business as “a falling knife.”

“I’m generally a contrarian. I generally rub my hands together at the opportunity for serious dislodgement,” he said. “[But] an area that’s in this much disarray, with so many weak players, it’s not an area where I would want to deploy capital at this time.”

Zell did say that in many cases the locations of retail stores are desirable, even if the objectives of the businesses are not.

“The basic regional mall is becoming a mini-downtown, and becoming much more diverse. And therefore saving itself,” he said. “The local corner strip center is still convenience. Everything in between is an oxymoron.”

The real problem has to do with supply, Zell said. “The U.S. has four or five times the amount of square footage per person of retail as anywhere else in the world.” As the industry deals with a correction, retail is going to be “less comfortable for the next few years,” he added.