Retailers could see fewer store openings and closures this year

The outlook for US retail store openings and closings in 2024 looks slightly sunnier than last year, per a recent report from research firm Coresight.

In 2023, US store openings outpaced closings for the second straight year. Major retailers closed 4,913 stores (totaling 88+ million square feet), up 28.6% year over year, and also opened 5,645 stores, up 4.7% annually. Home and office retailers were the leading sector for closures, accounting for nearly a third of them, followed by apparel, which shuttered 1,046 stores. General merchandise discount stores had the most openings, at 34.3% of all openings.

• Bed Bath & Beyond had the most store closures (886), while Dollar General led the charge in store openings (1,009).
• Off-mall retailers saw the most openings and closures of any retail location type.

This year, Coresight foresees 4,000 retail store closures and 5,500 openings in the US. About 592 stores have closed (407 of those closures being drugstores) and 1,611 have opened (including 880 discount stores) already this year, as of January 12. The firm projects that clothing retailers and drugstores will be the closures leaders, while discount stores will remain the top sector for openings.

• Walgreens Boot Alliance has said it will close 200 stores in the US by the end of fiscal 2024, while Sleep Number will shutter 40.
• Meanwhile, Dollar General will open an estimated 803 stores this year, JD Sports about 125, and Casey’s General Stores approximately 116.

Zoom out: Retailers may still experience headwinds in 2024 from consumer demand and higher interest rates that impacted retailers like Bed Bath & Beyond last year, though to a lesser degree, Coresight forecasted. Overall, the firm predicts retailers offering big-ticket items will feel the most pressure this year, while the discount segment will continue to expand.