Retailers Close Nearly 3,200 Stores Amid Economic Challenges

Retail chains are shuttering almost 3,200 stores in 2024, marking a significant increase from last year, according to a new survey by CoreSight Research. This surge represents a 24% rise in store closures compared to the same period in 2023, highlighting the ongoing struggles faced by brick-and-mortar retailers.

Several factors are driving these closures, including bankruptcies, inflation, and the increasing prevalence of shoplifting. Retailers cite the prohibitive costs associated with maintaining physical stores in the face of these challenges. Organized retail theft has become a particularly urgent issue, affecting both large retail chains and small businesses.

A shift in consumer behavior is also contributing to the decline in physical store traffic. More customers are opting to shop online at platforms like Amazon, a trend that has been growing over the past two decades.

Among the notable closures, RiteAid and clothing retailer Rue21 have declared bankruptcy.

Rue21, citing inflation, plans to lay off all 4,900 of its employees and close numerous stores. RiteAid will shutter 165 stores this year. The CoreSight report noted that drug store and pharmacy closures alone have resulted in about eight million square feet of retail space becoming vacant.

Dollar Tree is also significantly downsizing, planning to close more than 600 Family Dollar locations due to inflation and shoplifting, the largest number of closures by any retailer so far this year. Tupperware announced it would close its only U.S. factory in South Carolina, laying off 148 workers, and will continue production in Mexico.

Other retailers closing a substantial number of stores include 99 Cents Only Stores (371 stores), CVS (315 stores), 7-Eleven (272 stores), Express (105 stores), Walgreens’ parent company (77 stores), and Macy’s (51 stores). Stores closing under 50 locations include Sleep Number, Burlington, Foot Locker, Carter’s, Abercrombie & Fitch, Big Lots, Dollar General, H&M, Best Buy, and Ross, among others.

Despite these closures, some chains are expanding. Dollar General plans to add over 800 new locations this year, 7-Eleven aims to open more than 270 stores, and Five Below is set to open 227 new stores.

The economic strain on Americans is evident as inflation continues to impact everyday expenses such as food, gas, and housing. Prices have risen 20% since January 2021.

Although inflation has decreased from its peak of 9.1% in June 2022, it remains high at about 3.3% as of last month, still above the Federal Reserve’s target of 2%.

This wave of store closures reflects the broader challenges facing the retail industry as it navigates economic turbulence and changing consumer preferences.