In the evolving world of retail, the landscape is undergoing a dramatic transformation, marked by an alarming surge in store closures across the United States. According to Coresight Research, 2024 witnessed the closure of a staggering 7,325 retail locations, the highest number since the onset of the pandemic. This troubling trend is anticipated to continue, with projections suggesting that around 15,000 stores could close in 2025 alone. The underlying causes of this phenomenon extend beyond mere economic fluctuations; they reflect a profound shift in consumer behavior and the rising dominance of a handful of major players in the industry.
The closures seen last year are reminiscent of the nearly 10,000 stores that shuttered in 2020, underscoring the long-term implications of the pandemic on retail as we knew it. The data highlights that the retail sector is bifurcating—some key players, such as Amazon, Costco, and Walmart, are capturing increasing market shares while numerous smaller and specialty retailers are struggling to survive. This growing disparity raises questions about the future of traditional retail.
Bankruptcies have played a significant role in the surge of store closures, with Coresight reporting that 51 retailers declared bankruptcy in 2024, nearly double the 25 recorded in the previous year. Companies like Party City, once a well-known brand for festive needs, now face drastic financial restructuring, which necessitates closing a multitude of locations. Alongside Party City, notable retailers such as Big Lots and The Container Store are grappling with similar fates, largely influenced by shifting consumer preferences.
Interestingly, while consumer spending remains robust, a more significant portion of that spending is funneled toward a select few retailers. The National Retail Federation disclosed that holiday sales during 2024 rose to $994.1 billion, representing a 4% year-on-year increase. This growth aligns closely with pre-pandemic spending patterns, yet it simultaneously indicates that legacy brands are losing relevance amidst modern shopping habits.
Specialty retailers are particularly vulnerable in this climate. The discount chain Big Lots, for instance, announced store closures following an unsuccessful sale. Compounding the woes of such niche players are the bankruptcy filings of larger chains like Joann, a fabric and craft retailer, which succumbed to the pressures of the current retail landscape for a second time in just a year. Other notable casualties include Clifton’s Family Dollar, CVS Health, and rue21—all of which were at the forefront of last year’s notable closures.
John Mercer, the head of global research at Coresight, notes that the competitive threats posed by larger retailers and shifting consumer orientations, not a lack of demand, underlie these challenges. This assertion reinforces the idea that while consumers are willing to spend, their choices are increasingly gravitating toward businesses that offer value and convenience—qualities epitomized by giants like Walmart and Amazon.
The transformation of retail space is not merely about store closures; it includes the reinvention of physical venues. The closure of a major anchor store, such as Macy’s, can create a ripple effect leading to a downturn for adjacent smaller retailers. In response, shopping malls and strip centers are adapting by diversifying their offerings to include gyms, health clinics, and even residential developments—an evolution driven by changing consumer habits and a post-pandemic reevaluation of retail space utilization.
As they adapt to new realities, companies are reevaluating their store footprints. This has led to a rethinking of expansion strategies and a growing recognition that online sales are the primary drivers of growth in today’s market. Retailers that had long been reliant on extensive physical locations are now recalibrating their structures to focus on e-commerce, leading to a preference for fewer, strategically located stores.
Despite the grim outlook regarding closures, there is a silver lining: store openings are also on the rise. In 2024, the U.S. saw 5,970 new store openings, signaling a potential shift in the retail paradigm. Noteworthy among these new additions are chains such as Dollar General and 7-Eleven, which continue to thrive.
As we move further into 2025, expectations indicate that approximately 5,800 new stores may open, affirming that even amidst closures, opportunities still exist for certain sectors. Retailers like Aldi and Barnes & Noble are leading the charge in forging new opportunities, highlighting that an adaptable approach can yield positive outcomes.
The American retail landscape is in a state of flux, characterized by a pronounced squeeze on physical stores as consumer priorities shift. While large retailers capitalize on their brand strength and operational efficiencies, many once-beloved chains face an existential crisis. As closures may dominate headlines, the simultaneous surge in new openings reveals a multifaceted retail ecosystem. Adapting to consumer preferences and reimagining retail spaces will be vital for businesses seeking to navigate the uncertainties of the future—a future where flexibility and innovation will determine who thrives and who falters.