This year was a rough one for some major retailers, as illustrated by an 80% surge in store closures in 2023 from the year before, according to Coresight Research.
The reasons for this year’s more than 4,600 store closures are varied, ranging from the bankruptcy of a major retail chain to some operators closing underperforming locations. In some cases, retailers blamed rising theft for their rationale in closing some locations.
Against the backdrop of the closures are several trends weighing on some brick-and-mortar businesses. For one, Americans continue to shift to online shopping. And secondly, inflation-wary shoppers are cutting back on some types of purchases, such as electronics and jewelry.
But it’s not all doom and gloom in the retail sector, given that retailers actually opened almost 5,500 stores in 2023, more than offsetting the number of closures this year, Coresight’s data shows. In some cases, retailers moved into locations vacated by other businesses.
“Some of our best stores were created from carved-up Kmart or Sears locations,” Burlington Stores CEO Michael O’Sullivan said earlier this year, according to a local CBS affiliate. Burlington has taken over more than 40 former Bed Bath & Beyond spaces.
Bed Bath & Beyond
Topping the onslaught of closure announcements is Bed Bath & Beyond, whose April bankruptcy led to the closure of 866 stores, by Coresight’s count.
Even though Bed Bath & Beyond’s physical presence has ended, its blue logo lives on. Overstock.com bought the brand out of bankruptcy and relaunched its own site as BedBathandBeyond.com. It also revived its iconic coupon providing 20% off a single item, but the discount is now for online use only.
Rite Aid accounts for 335 of the year’s store closure announcements, an uptick from the chain’s shuttering of 158 stores in 2022. The pharmacy chain, which filed for bankruptcy in October, plans to close more of its 2,100 pharmacies in the face of falling sales and opioid-related lawsuits.
Nearly 100 of this year’s closures involved David’s Bridal. The wedding gown retailer filed for bankruptcy in April, but continues to run as many as 195 stores.
By the end of this summer, more than 80 Christmas Tree Shops had closed after the New England retailer filed for bankruptcy in May. The chain had tried rebranding as “CTS” in 2022 as people outside of New England mistakenly thought it only sold trees.
Further down the list is Party City, which shuttered 31 shops this year and emerged from bankruptcy protection in September, vowing to keep the bulk of its 800 stores nationwide running.
Dollar Tree closing stores — and opening them
Some dollar store chains also closed hundreds of stores in 2023, led by Family Dollar with more than 100 closures. Competitor Dollar General closed 74 locations, while Dollar Tree (which also owns Family Dollar) closed 59 shops.
But despite these closures, dollar stores are a growing business in the U.S., with these retailers — which tend to sell items for about $1 each — announcing 1,600 new store openings in 2023. That represents about one-third of all new openings this year.
And the discount retailers already have big plans for 2024, targeting more than 1,500 new stores between them next year.
Here’s what is closing in 2024
As for next year, U.S. retailers have so far announced 580 store closures, with the shutterings led by CVS Health and Walgreens.
Pharmacy chains have struggling in facing lower reimbursement rates and competition from Amazon and Walmart, while dollar stores have fared better as inflation-weary consumers seek discounts.
