Topline
Twice as many retail stores will close in the U.S. this year than were shuttered last year, and many more stores will close than open, according to Coresight Research.
“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a … [+]
Key Facts
Retailers will close up to 15,000 stores this year, more than double the 7,325 closures in 2024 and breaking the closure record set in 2020 during the pandemic.
Retailers are projected to open only 5,800 stores, slightly less than the 5,970 opened last year, but representing a widening gap favoring closings over openings.
Retailers have announced three-times more store closures this year compared to the same time last year and about 30% fewer openings.
To date, retailers have announced over 2,000 closures, with bankrupt Party City (738 closing) and Big Lots (601) leading the field, followed by Walgreens Boots Alliance (333), 7-Eleven (148), Macy’s (51) and Kohl’s (27).
Some 1,000 store openings in 2025 have been announced, topped by Aldi (170 new stores), followed by JD Sports (124), Burlington Stores (104), jewelry retailer Pandora (61), bookstore chain Barnes & Noble (60) and Dollar General (60).
Unpredictable retail bankruptcies typically account for the largest number of closures, and last year, the number of bankruptcies doubled over those in 2023, up from 25 to 51 in 2024.
Crucial Quote
“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a toll on brick-and-mortar retailers in 2024. We continue to see a trend of consumers opting for the path of least resistance. Not only do they want the best prices, but they also have no patience for stores that are constantly disorganized, out of stock, and that deliver poor customer service,” said Coresight CEO Deborah Weinswig in a statement.
Discounters Offer A Hedge Against Inflation
Inflation-weary consumers are shifting their buying habits. Discount outlets are expected to post the highest number of new stores this year, such as Dollar Tree, which is pivoting from its Family Dollar banner after closing over 700 FD stores last year, and Dollar General, that has already announced 60 openings. Ironically, discount stores led in both store closures, i.e. bankruptcies of 99 Centers Only Stores and Big Lots, as well as in store openings in 2024. Big-box discounters will expand too. Walmart plans to add 30 stores this year and Costco will expand by 14. In the grocery sector, Aldi continues to lead in openings, adding 170 stores this year after 121 openings last year. Grocery Outlet followed with 55 openings last year.
More Online Shopping Means More Closed Stores
Shoppers continue to gravitate toward the convenience and price advantage of online shopping. In 2019, non-store retail represented 21% of retail, excluding motor vehicles and motor parts, gasoline stations and food service. Now it stands at 29%, having advanced from 28% last year, according to the Census Bureau. Thus, many past and planned closures are adjustments or right-sizing of retailers’ physical footprints. Coresight also calls out increased e-commerce competition from Chinese-based off-price online platforms Shein and Temu as they expand into non-apparel offerings and capture sales from mass merchants and other category retailers.
Pharmacy Deserts
CVS Health with 586 closures accounted for the second largest number of closings last year. In addition, Rite Aid shuttered 408 stores, and Walgreens Boots Alliance closed 259, leading Coresight to warn of “pharmacy deserts” emerging in parts of the country to the benefit of mass merchants and grocery chains with pharmacy departments.
Home Retail Footprint Continues To Shrink
So far this year, no home and office retailers have announced closures, but that may be because so many closed over the last two years: 1,679 in 2023 and 1,307 in 2024. Bankrupt furniture retailer Conn’s had the third highest number of closings last year at 553, and bankruptcies also led to American Freight closing 353 and LL Flooring, now rebranded as Lumber Liquidators, closing 213 stores. However, a handful of home retailers have announced openings in 2025, including five by Beyond (the old Bed Bath and Beyond brand), three for both Febal Casa and Hästens, two Perigold stores and one Home Depot.
Shifting Landscape In Apparel
The apparel, footwear and accessories sector experiences significant churn year after year. It accounted for the third largest number of closures last year (1,383) after discount stores and home retailers, and added the second-largest number of openings, totaling 1,478, mainly in the off-price sector. In 2024, bankruptcies of Rue21 and Express led to 543 and 105 store closures, respectively. Foot Locker also shuttered 118 stores last year, and it has announced eight more planned closures this year.
Tangent
The social-media fueled “No-Buy” or “Underconsumption” trend is gaining ground as consumers seek to take back control of their spending and pay off debt. The concept is to strike certain purchases off one’s purchase list, such as swapping a morning Starbucks coffee with a home brew, do-it-yourself whenever possible, buy only what is needed, and if a purchase must be made, to try to buy it second hand. People can see and feel the benefits almost immediately, the Wall Street Journal reports.
Big Number
Through the third quarter of 2024, the Federal Reserve Bank of New York reported household debt is at an all-time $17.94 trillion high, including mortgage debt at $12.79 trillion, credit card debt of $1.17 trillion and auto loans at $1.64 trillion.
Retail In Constant State Of Flux
GlobalData’s Neil Saunders said it’s too soon to call it another “retail apocalypse.” The large number of store closures expected in 2025 and that happened last year are primarily a survival of the fittest phenomenon. In addition, some retailers have brick-and-mortar “dead wood” that needs clearing out. “This is a healthy thing, and it does not follow that all of retail is in a bad way. At the end of this process the vast majority of sales will still be made through physical stores. I see this as an adjustment rather than some kind of calamity,” he said.
Further Reading
Coresight Research Predicts 2025 Store Opening, Closure Numbers (Business Wire, 1/23/2025)
Retail Apocalypse: 15,000 Stores Could Close in 2025 with Party City, Big Lots, Walgreens, 7-Eleven, Macy’s On the Doomed List (Fast Company, 1/24/2025)
U.S. Retail Ends 2024 Strong With Wind At Its Back Starting 2025 (Forbes, 1/19/2025)
Closing Stores Can Result In Greater Losses Than Retailers Plan (Forbes, 1/30/2024)
The Buy Nothing Movement Gains Traction (The Robin Report, 1/14/2025)
According to recent projections, twice as many stores in the U.S. are expected to close in 2025 compared to the previous year. This comes as no surprise as the retail landscape continues to shift with the rise of e-commerce and changing consumer preferences.
With more and more consumers opting to shop online, traditional brick-and-mortar stores are facing increasing challenges to stay afloat. The impact of the COVID-19 pandemic has only accelerated this trend, forcing many retailers to reevaluate their business models and make tough decisions about their physical locations.
As we look ahead to 2025, it is clear that the retail industry will continue to undergo significant transformation. While this may mean closures for some stores, it also presents opportunities for innovative brands to adapt and thrive in the changing market.
Stay tuned for updates on which stores will be affected and how the retail landscape will evolve in the coming years.
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