Unprecedented wave of store closures sinks U.S. retail industry

By ramontomeydw // 2024-12-17

Mastodon

Parler

Gab

Copy

Over 7,100 U.S. stores closed in November 2024, marking a 69 percent increase from the previous year according to CoreSight data. This trend indicates deeper economic challenges and a surge in retail bankruptcies, with 45 retailers filing for bankruptcy in 2024 compared to 25 in the previous year.
Rising inflation and economic pressures have led consumers to prioritize essential goods and reduce discretionary spending. This shift has particularly affected discount retail chains and pharmacy stores, such as Family Dollar and CVS Health.
Retailers are struggling to adapt to the changing economic climate due to inadequate product offerings and weak responses to competitive threats. Analysts like Neil Saunders from GlobalData argue that the current crisis is not just due to economic downturns but also a natural part of the industry's ebb and flow.
While some discount retailers like Dollar General and Dollar Tree are thriving, the overall trend suggests a polarized retail environment. Successful retailers are focusing on operational efficiency and financial stability to navigate the current challenges.
Despite predictions of stabilization in 2025, analysts warn that the retail sector is facing significant disruptions. The surge in store closures is a signal for deeper structural changes, emphasizing the importance of innovation, efficiency and strategic decision-making for long-term survival in the evolving retail landscape.

The retail landscape in the United States is witnessing a stark shift, characterized by an unprecedented wave of store closures that signals deeper economic challenges. Data from the research firm CoreSight revealed that over 7,100 stores closed their doors by the end of November 2024, marking a 69 percent increase from the previous year. This surge in closures is not just a symptom of the ongoing economic pressures but also a precursor to further difficulties in the industry. The rise in store closures is closely tied to a wave of retail bankruptcies, with 45 retailers filing for bankruptcy protection this year compared to 25 last year. This alarming trend underscores the struggle retailers face in adapting to the changing economic climate, particularly in the face of persistent inflation. Feeling the pinch of rising costs, consumers have shifted their spending patterns toward more essential goods, leading to a shift away from discretionary spending. (Related: RETAIL COLLAPSE ACCELERATES: Discount homeware chain Big Lots is closing 315 stores due to financial struggles and declining sales.) Leading the charge in closures are discount retail chains and pharmacy stores. Family Dollar and CVS Health have been particularly hard-hit, with CVS alone witnessing the closure of over 7,000 pharmacy locations since 2019. These closures are not only a reflection of economic pressures but also highlight deeper issues within the retail sector, including inadequate product offerings and weak responses to competitive threats. Neil Saunders, an analyst with GlobalData, emphasizes that the current retail crisis is not solely a result of economic downturns. "There is not enough growth in the retail market for every player to do well," Saunders notes. "Retailers are entering a period of restructuring, focusing on operational efficiency and financial stability." Despite the gloomy outlook, some discount retailers like Dollar General and Dollar Tree are thriving, expanding their presence with new store openings. However, the overarching trend suggests a polarized retail environment where success is limited to a select few. Family Dollar, in particular, has struggled to compete in a market where price-conscious consumers are becoming increasingly selective.

Even restaurants aren't exempt

The restaurant industry is witnessing a similar trend, with a significant number of chains reporting net decreases in locations. Over 33 percent of ranked chains experienced a decline in locations in 2023, a figure that has continued to rise in 2024. Many of these closures were triggered by the lingering effects of the pandemic, with higher costs and debt pushing many to shutter under-performing units. However, the closures also serve as a strategic move to refocus on stronger, more profitable units and revitalize their brands. Despite the immediate wave of store closures, industry analysts predict a period of stabilization in 2025. However, this does not mitigate the broader concerns of a retail sector undergoing significant disruptions. Saunders suggests that the current "down cycle" for store closings is part of a natural ebb and flow within the industry. Nevertheless, the sheer magnitude of closures raises serious questions about the resilience of the U.S. retail sector in the face of ongoing economic challenges. As inflation and consumer spending habits continue to evolve, the retail industry is at a crossroads. The surge in store closures in 2024 is not just a temporary setback but a signal that deeper structural changes are necessary. Retailers, investors and consumers alike will need to adapt to a new reality where survival is increasingly dependent on innovation, efficiency and strategic decision-making. The question remains whether the current restructurings will be enough to prevent further crises in the future. Visit EconomicRiot.com for more stories like this. Watch this video about the mass closures of department store chains TJMaxx and Marshalls, alongside other businesses. This video is from the Pool Pharmacy channel on Brighteon.com.

CITIZENS NEWS

Even restaurants aren't exempt

More related stories: