Stores across the U.S. are closing at unprecedented levels, according to new research from advisory firm Coresight Research. Read on for more information about the impact this could have on you and your communities.
Store Closures Sweep Across the U.S.
Last year, U.S. retailers shut stores across the country.
Impact on Various Sectors
From clothing to drugstores to groceries and electronics, clothing has hit all sectors, with popular brands like Bed Bath & Beyond (BB&B), Rockport, and Party City all being hit as more and more customers move to online shopping.
Insights into Store Closure Trends
According to Coresight’s data, BB&B shut almost 870 stores in 2023, followed by Walgreens with over 500 stores, Rite Aid with 470 closures, and Tuesday Morning with 463 closures.
Bankruptcies and Closures
Three out of four of these filed for bankruptcy – Tuesday Morning, Rite Aid, and BB&B – which forced them to close almost all of their stores in an effort to save any money possible.
Inflation-Driven Theft
Other retailers remained afloat but closed stores due to low turnover and lack of footfall. Some retailers pointed the finger at inflation-driving theft in their stores as an explanation for their lack of profits and the subsequent store closures.
Hardest Hit by Store Closures
The home and office sector saw the most closures – over 30% of stores that were closed were part of this sector, more than double the amount in 2022. BB&B accounted for just under half of these closures, followed by Walgreens.
National Closure Figures
According to Coresight’s data, over 5,000 stores shut nationwide—5463 to be precise—a 30% increase from the previous year.
Walgreens’ Store Closures
Despite closing over 500 stores, Walgreens still boasts almost 9000 locations nationwide. Whether the company will announce more closures remains up in the air.
Additional Retailers Affected
Aside from the previously mentioned companies, a number of other big retailers shut stores last year, including 7-Eleven, Family Dollar, David’s Bridal, Signet Jewelers, Foot Locker, Couche-Tard, The Children’s Place, and Barnes & Noble.
Job Loss Concerns
The closing of stores all over the country is causing concern for everyone, not just the businesses involved. One big worry is the mass loss of jobs, which can be tough on families and local economies.
Ripple Effects
It’s not only store workers in the firing line – it can also affect companies that supply goods to these stores and the truck drivers who deliver products.
Community Impact
It’s also not just about losing a paycheck; it affects the whole community. When stores shut down, cities lose out on tax revenue from sales, which can lead to cuts in services like schools or roads.
Sometimes, taxes have to go up for residents to cover the losses.
Empty Storefronts Pose a Problem
The empty storefronts left behind can also create problems. They can lower property values and make areas look less appealing, which might discourage new businesses from opening up.
Outsider Perspectives
All of this can change the vibe of a neighborhood and affect how people view our communities.
Online Shopping Trends
Why is this happening? Well, a big part of it is that more people are choosing to shop on the internet. These closures are a sign of how we’re changing the way we shop.
The Pandemic’s Influence on Retail Landscape
It’s often more convenient, and sometimes you can find better deals online than in physical stores. This trend has hit many sectors hard, particularly following the pandemic, which sped this shift up.
Challenges for Offline Shoppers
While the shift to online shopping can be positive, it can also be challenging for those without reliable internet access, the older generation, or those who just prefer the in-person experience.
Blending Online and In-Store Experiences
Businesses and local leaders need to find new ways to adapt to the ever-changing retail world. Stores need to find ways to blend online and in-store experiences and make it easier for people to shop how they want.
Local Support Initiatives
Cities and towns can help by supporting small businesses and investing in things that make our communities stronger, like better infrastructure or programs that encourage local entrepreneurship.
Job Creation and Economic Growth
Supporting small businesses can help boost job creation, invest the money back into the local economy, and be a net boon for your town in general.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
