Retailers Close 3,200 Stores Amid Rising Costs and Theft

Retail chains are shuttering nearly 3,200 stores in 2024, marking a sharp 24% increase from the same period last year, according to a new survey by CoreSight Research. This troubling trend reflects the mounting challenges faced by brick-and-mortar stores, from soaring inflation to rampant shoplifting.

Major retail chains have also announced 4% fewer store openings compared to last year, underscoring the bleak outlook for the sector. Several factors contribute to these closures:

• Bankruptcies and Inflation: Companies like RiteAid and Rue21 have declared bankruptcy, citing the unsustainable costs of inflation. Rue21 plans to lay off all 4,900 employees as it closes its stores.

• Organized Retail Theft: Retailers, especially in high-crime areas, struggle with the rising costs of theft. Dollar Tree has pointed to both inflation and shoplifting as reasons for closing over 600 Family Dollar locations, the largest number of any retailer this year.

• Shift to Online Shopping: The convenience of online giants like Amazon continues to draw customers away from physical stores, contributing to declining foot traffic over the past two decades.

The closures are creating a significant amount of vacant retail space. The CoreSight report notes that drug store and pharmacy closures alone have left about eight million square feet of empty retail space in the U.S. this year.

Other notable closures include:

• 99 Cents Only Stores: Closing 371 locations

• CVS: Shutting down 315 stores

• 7-Eleven: Closing 272 stores

• Express: Closing 105 stores

• Walgreens’ parent company: Closing 77 stores

• Macy’s: Shutting 51 stores

While the closure list is extensive, some retailers are still expanding. Dollar General plans to add over 800 new locations this year, and 7-Eleven will open more than 270 new stores. Five Below is also on track to open 227 new stores.

The economic strain on American consumers is palpable. Since January 2021, prices for everyday necessities have skyrocketed by 20%, driven by inflation. Although inflation has decreased from a peak of 9.1% in June 2022, it remains elevated at 3.3% as of last month, still above the Federal Reserve's 2% target.

The retail apocalypse reflects broader economic struggles and a challenging landscape for businesses and consumers alike. Stay informed on critical economic issues. Share this article or subscribe to our newsletter for more updates.