In 2024, the U.S. retail sector faced a challenging outlook with 7,100 store closures, a 69% increase from the previous year, according to a report from the firm CoreSight. This drastic increase reflects the current economic challenges. That’s where inflation reduced consumer spending, directly impacting sales and driving multiple companies into bankruptcy or mass layoffs.
Neil Saunders, an analyst at GlobalData, explained that growth in the market is not enough to benefit all players.
“Many of the chains that are closing stores have problems that go beyond economics. Their propositions may not be the right ones, their offerings may not be what consumers want, and they may not have responded to competitive threats in the right way.”
Neil Saunders
Main Retail Chains Affected
CoreSight‘s analysis detailed that 45 retailers filed for bankruptcy this year, up significantly from 25 in 2023. Among the hardest-hit companies were Family Dollar, CVS Health and Big Lots, which closed 677, 586 and 580 locations, respectively. Other chains such as Conn’s, rue21, 7-Eleven and Rite Aid were also part of the list of massive closures.
Saunders said many of these companies face internal problems that go beyond economics, such as poor value propositions or inadequate strategies to compete in today’s marketplace. “This has been a year of change after several years of disruption. I think these things tend to happen in cycles and we are currently in a downward cycle of store closures,” the analyst concluded.
This scenario highlights the need for retail chains to redefine their strategies to face market changes and new consumer demands.
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