Over 6,481 retailers have closed their doors since the beginning of the new year, according to data from Coresight Research in November, but that figure is expected to reach 7,327, marking a 57.8% increase in closures since 2023.
During the pandemic, closures exceeded openings by 180 stores in 2020, with the gap widening in 2021 to 6,000 retailers. There were 5,919 store openings in 2023, barely easing the burden. While online shopping has nulled the need for many brick and mortars, the types of retailers that experienced the steepest declines are telling.
Nothing at the dollar store costs a dollar. That changed years ago during the pandemic, thanks to tariffs and supply chain issues. Retailers had to mark up these cheap goods to make a meager profit. As a result, Family Dollar shut their door to 677 locations and 99 Cents Only stores shed 371. Big Lots, also known for selling discounted items, has been forced to close 580 locations, although the bankruptcy played a larger role.
Rite Aid also experienced bankruptcy in 2024, closing 408 locations. Pharmacies, in general, took a major hit this past year. Walgreens plans to close 1,200 locations over the next three years and lost 259 locations in 259. CVS closed 586 locations as well. The convenience of picking up items while at the pharmacy does not overshadow the need for a discount. People are not willing to pay more for essentials at the pharmacy when they can receive them for a discounted price elsewhere. The same goes for convenience stores like 7-Eleven which shed 492 locations in 2024 with plans to close another 400 worldwide.
Another major contributing factor is the workforce – people do not want to work low-wage jobs that do not support their cost of living. Enter any pharmacy or low-end store, and you will find a severe shortage of workers. One pharmacy by me that is part of a major chain is only open two days a week because they simply do not have the staff to keep it operating.
There is a reason that retail closures are at their highest level since the pandemic. Americans are spending more on less and their spending habits are shifting from convenience to practicality.
