Early in the pandemic, some predicted that a “retail apocalypse” would soon deal a serious blow to the brick-and-mortar model, with one 2021 UBS report even predicting that more than 80,000 retail stores would close within the next five years.
Three years later, such prophecies appear overblown—but not entirely without merit.
According to the latest data from Coresight Research, there were 3,238 retail closings and 3,761 openings in the US this year as of May 20. That means openings are still outpacing closings (which is good news) but closures are up 23.4% and openings are down 5.5% compared to the same period last year (which is bad news).
- In 2023, closures were also up 80% at more than 4,600, according to Coresight, though these were offset by a greater number of openings.
This might not qualify as an “apocalypse”—maybe more of a localized disaster—but it’s clear retailers are going through something. Here’s a closer look at which stores are thriving, which are surviving, and which are experiencing their own private doomsdays.
Dollar stores and pharmacies: Leading the pack in brick-and-mortar closures are two clear frontrunners: pharmacies and dollar stores.
So far, the company to shutter the most stores in 2024 is Dollar Tree. The discount chain closed 620 locations, the majority coming from its Family Dollar subsidiary. The company said the closures are part of a “comprehensive store portfolio optimization review,” but the problems appear to stretch back to its acquisition of Family Dollar back in 2015. CEO Rick Dreiling put it this way in a recent earnings call: “We have had in the past a real estate strategy that wasn’t really focused on maximizing value.”
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However, Dollar Tree is acquiring yet another discount chain, 99 Cents Only, which just so happens to be the store with the third-largest number of closures. The California-based chain shut down its entire footprint, 371 stores, when it declared bankruptcy this spring.
Onto pharmacies: The three big chains—Walgreens, CVS, and Rite Aid—all closed a significant number of stores this year, with CVS shutting down 315, Rite Aid shutting down 165, and Walgreens shutting down 77. As Bloomberg recently reported, all of these companies are struggling to make their business models work amid rising competition, higher levels of shrink, and staffing shortages.
Big box and more dollar stores: On the other side of the spectrum, a number of retailers are expanding, which is helping openings continue to outpace closings.
Lest you point the finger at the discount model itself, Dollar Tree rival Dollar General has opened the most stores so far this year at 819 new locations, as it simultaneously pares back its inventory for a leaner business model. Other discounters, such as Five Below, Burlington, and TJX Companies, also cracked the top 10 for store openings.
Another standout is Aldi, the German discount grocery chain. The company has opened 126 stores this year and plans to open 800 new locations in the next four years.
Meanwhile, big box stores such as Walmart and Target haven’t yet stood out in terms of the sheer number of openings, but they have big expansion plans on the horizon. Walmart plans to build or convert 150 locations over the next five years, while Target plans to open 300 new locations over the next decade.