The U.S. retail landscape is experiencing a dynamic shift, with store openings on the rise yet overshadowed by a looming wave of closures. Aldi, JD Sports, Burlington Stores, Pandora, and Barnes & Noble top the list of retailers announcing significant store openings so far this year. However, the retail sector faces challenges as several prominent companies shutter stores and file for bankruptcy protection. Conn's and rue21, among others, have closed all their outlets following financial struggles.
Retailers anticipate delivering their holiday-quarter results starting in mid-February, amidst a backdrop of fluctuating market conditions. A notable spike in store closures in 2024 marks the sharpest increase since nearly 10,000 U.S. stores closed in 2020. The closures tend to fall into three categories: liquidation, Chapter 11 bankruptcy filings, or strategic downsizing due to shifting consumer preferences.
Last year, Family Dollar led the pack with the highest number of store closures, followed by CVS Health, Conn's, rue21, and Big Lots. Meanwhile, Dollar General, Dollar Tree, 7-Eleven, Oxxo, and Five Below saw the most store openings in the same period. Despite a high number of openings, experts project closures will outpace them by 2025. David Silverman, a retail analyst at Fitch Ratings, points out that certain unique factors have widened the gap between store openings and closures.
"Most companies are not adding a significant number of square footage and even the ones that until recently were adding a lot, like the dollar stores, are rethinking their footprints," – David Silverman, a retail analyst at Fitch Ratings.
The competitive landscape is further shaped by major players like Amazon, Costco, and Walmart, which have expanded as consumers increasingly prioritize value and convenience. However, the number of retail bankruptcies doubled from 25 in 2023 to 51 in 2024. Retailers have already announced 1,925 store closures for 2025, with Party City, Big Lots, Walgreens Boots Alliance, 7-Eleven, and Macy's leading this trend.
Macy's plans to close approximately 150 of its namesake stores nationwide by early 2027. Store closures in the U.S. last year reached a pandemic-era high of 7,325, according to Coresight Research. Coresight also estimates that Chinese e-commerce giants Shein and Temu collectively amassed around $100 billion in sales last year, underscoring the growing influence of online retail.