Store closures across the United States surged to their highest level since the pandemic, with significant closures in 2024, and more expected in 2025. A new report reveals that major retailers such as Party City, Big Lots, Walgreens, and Macy’s have been at the forefront of this wave of closures, as a growing number of stores are being shut down due to changing consumer habits and the rise of e-commerce.
A Sharp Increase in Retail Store Closures
The number of retail store closures reached a peak in 2024, with 7,325 locations shutting down, according to a report by Coresight Research. This marks the sharpest increase in closures since 2020, the year the COVID-19 pandemic began when nearly 10,000 stores were closed. As the retail landscape continues to evolve, more closures are expected this year. By January 10, 2025, retailers had already announced 1,925 store closures, and projections estimate that this number will rise to around 15,000 by the end of the year.
Among the companies closing the most locations are Party City, Big Lots, Walgreens Boots Alliance, 7-Eleven, and Macy’s. These closures are part of a broader trend where certain retailers are struggling to stay afloat while others, like Amazon, Walmart, and Costco, continue to thrive by capitalizing on consumer demand for convenience and value.
Bankruptcy Surge Contributing to Closures
In addition to shifting consumer preferences, an increase in retail bankruptcies has contributed to the high number of store closures in 2024. According to Coresight’s data, there were 51 retail bankruptcies in 2024, nearly double the number from the previous year. Notably, Party City and Big Lots have been forced to close many of their locations as part of bankruptcy proceedings.
Despite strong consumer spending, which rose 4% during the holiday season in 2024, the dollars are flowing to fewer retailers. Major chains that have adapted to evolving shopping habits have benefited the most, while smaller, specialty retailers have struggled to remain viable.
Struggling Specialty Retailers
Specialty retailers have been particularly hit hard by the ongoing changes in consumer behavior. Companies like The Container Store, Big Lots, and Joann have filed for bankruptcy protection. The Container Store’s filing follows a broader trend where smaller retailers close stores or downsize due to shifting demands and market pressures.
It’s not just specialty stores that are feeling the squeeze. Companies like CVS Health, Dollar Tree’s Family Dollar, and rue21 have also experienced large-scale closures. For example, rue21, a teen apparel retailer, closed all of its stores following bankruptcy filings, further underlining the broader retail crisis.
The Impact of E-Commerce and Changing Consumer Preferences
Coresight Research attributes much of the decline in brick-and-mortar stores to the rise of e-commerce. Companies like Amazon, Shein, and Temu have significantly altered the retail landscape. In particular, Shein and Temu have seen explosive growth, generating billions in sales, with a significant portion coming from U.S. consumers.
Retail analyst John Mercer highlighted that while overall demand remains strong, it is being concentrated in fewer retailers that meet consumer preferences for convenience and low prices. He explained that smaller specialty retailers, especially those dependent on physical stores, have been unable to keep pace. Even minor declines in sales can be detrimental for retailers with high fixed costs like leases and labor.
Shifting Malls and Shopping Centers
The rise in store closures has also been linked to changes in mall traffic patterns. As major anchor stores like Macy’s close their doors, smaller retailers that rely on foot traffic may follow suit. Retail analysts suggest that many shopping malls and strip centers are being repurposed for other uses, such as fitness studios, urgent care clinics, or apartments, rather than being filled with new retail stores.
David Silverman, a retail analyst at Fitch Ratings, noted that population shifts and evolving consumer habits have led to a rethinking of retail store locations. The COVID-19 pandemic had already shifted where and how people shop, with many retailers reassessing their footprints in response.
Store Openings Still Strong
Despite the challenges faced by many retailers, some chains continue to expand. In 2024, store openings in the U.S. increased to 5,970, the highest number recorded since Coresight began tracking retail data in 2012. Leading the charge were Dollar General, Dollar Tree, 7-Eleven, and Five Below. The retail advisory firm predicts that 2025 will see approximately 5,800 new stores opening across the U.S.
A few key players are also pushing forward with store expansions, including Aldi, JD Sports, Burlington Stores, Pandora, and Barnes & Noble, which are expected to lead the list of store openings in 2025.
The Outlook for Retail
The U.S. retail industry is at a crossroads, with traditional stores closing in large numbers while e-commerce continues to reshape the marketplace. Retailers are grappling with how to adapt to changing consumer preferences and the growing influence of online shopping. As store closures continue to rise, companies will need to adjust their strategies, embracing new approaches to stay competitive in a rapidly changing environment.
