How Store Closures Could Reshape Employment and Economies in 2024

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As the retail sector crumbles in 2024, chain store closures ripple through America, leaving communities to wonder what the future holds.

At a Glance

  • A 69% surge in store closures, significantly impacting employment and local economies.
  • Coresight reports over 7,308 confirmed closures, impacting major chains like CVS and Big Lots.
  • Family Dollar closed 718 stores, with CVS and Big Lots also undergoing significant reductions.
  • High inflation and interest rates exacerbate retail troubles.

Retail Sector Faces Unprecedented Challenges

The year 2024 has unveiled an alarming trend—a significant rise in chain store closures across the United States. The retail landscape is dramatically shifting, with a staggering 69% increase in closed businesses. Icons of the industry like CVS, Big Lots, and Family Dollar are leading this wave, presenting a troubling picture for traditional retail. According to Coresight Research, the number of confirmed or anticipated store closures has climbed to 7,308.

This transformation reflects broader economic challenges. Retailers face high inflation and escalated interest rates, adding pressure to existing financial woes. The resulting strain is not confined to economic figures—employment levels, urban development, and community services are feeling the impact. Storefronts are left empty, leading to diminishing local economies.

Key Players in the Retail Downturn

The closure list is topped by Family Dollar, shuttering 718 locations. CVS and Big Lots, too, are notable contributors, with closures reaching 586 and 580 stores, respectively. The financial strain on retailers like Big Lots, facing bankruptcy and restructuring, is immense. They cite high inflation and interest rates as significant hurdles.

“There is not enough growth in the retail market for every player to do well, which is why we are seeing polarized results.” – Neil Saunders

Additional closures are seen among other chains such as Conn’s, rue21, and 7-Eleven, with over 500 locations impacted. Conversely, some brands are succeeding amidst adversity. For example, Dollar General continues to expand, opening 754 stores this year alone.

Economic Ripple Effects

The repercussions of these closures stretch beyond the companies themselves. They impact local economies, creating a ripple effect throughout the communities. Urban developments and property markets feel the brunt as consumer services become less accessible. Traditional retailers are urged to rethink strategies to survive in this new market reality.

“However, many of the chains closing stores are those that have problems which go beyond the economy. Their propositions might not be right, their offers might not be what consumers want, and they might not have responded to competitive threats in the right way.” – Neil Saunders

This crisis marks a turning point for the retail industry, raising awareness of the need for adaptability. Businesses that successfully navigate this period may set the stage for a stabilized market expected in 2025. Retailers must focus on revitalizing their operations and aligning with consumer demands to mitigate further contractions.

Sources

1. Store closures have surged 69% in 2024. Here are the retailers shuttering thousands of stores.

2. Retail, Chain Store Closures Have Surged 69% In 2024: Which Were Affected?