According to the latest data from research firm CoreSight, as of the end of November 2024, retail chains in the United States have announced the closure of over 7,100 stores, a 69% increase compared to the same period last year. So far this year, 45 retailers have filed for bankruptcy protection, while in the whole of 2023, there were a total of 25 retailers that went bankrupt.
Amid the surge in store closures, consumer spending seems to remain strong, contributing to boosting economic growth in the United States. However, cracks are beginning to show as some retailers report that inflation-weary shoppers are cutting back on spending or becoming more selective when hunting for deals.
While retailers like Walmart are seeking ways to attract budget-conscious shoppers, other chain stores are struggling. Target recently announced that earnings and sales for the last quarter fell below expectations. Family Dollar and CVS Health are among the companies facing challenges as consumers tighten their wallets, leading them to be among the retailers with the highest number of store closures.
Speaking about the significant increase in store closures this year, GlobalData analyst Neil Saunders told “CBS MoneyWatch”: “The growth in the retail market is not enough for every participant to excel, which is why we are seeing polarizing results.”
He added, “However, many of the chain stores closing their doors have issues beyond the economic scope. Their offerings may not be right, their products may not be what consumers want, or they may not be addressing competitive threats in the right way.”
According to CoreSight data, the retailers with the highest number of closed stores include discount chains and pharmacies. Family Dollar leads the pack with 677 stores closed so far this year, followed by CVS with 568 closures, and Big Lots with 580 closures.
Rounding out the list of top retailers from fourth to tenth place are: Conn’s (553), rue21 (543), 7-Eleven (492), Rite Aid (408), 99 Cents Only Stores (71), American Freight (353), Walgreens (259).
Citing data from the University of Pittsburgh, the Associated Press reports that pharmacy closures have been a long-standing issue, with over 7,000 pharmacies closed since 2019. This has resulted in pharmacy deserts in many areas of the United States, where residents have limited access to pharmacies for prescriptions and other health products.
In a research report on December 4th, Sanders pointed out that Family Dollar, which has undergone large-scale store closures this year, failed to attract price-sensitive shoppers, with its stores providing a “poor sales environment.”
He further stated that the landscape of the retail industry may stabilize next year, but there could be more store closures in 2025.
“Retailers are working to streamline their finances and operations. This year is one of transformation after experiencing several years of turmoil,” Sanders noted. “I believe these things often develop cyclically, and we are currently in a downturn cycle of store closures.”