The Supply Side: Retailers shuttered more than 7,300 stores in 2024
by January 30, 2025 11:46 am 243 views
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Plenty of U.S. retailers had a challenging 2024 amid higher interest rates and shifting consumer behaviors. Those factors and more resulted in a surge of store closures that totaled 7,327, up 57.8% from 2023, according to Coresight Research.
While store closures rose in 2024, so did store openings. Coresight reports U.S. retailers opened 5,919 store locations, up 8.2% from the previous year.
Credit analysts at Moody’s said 2024 created a tough operating environment for many retailers despite the improving economy. Consumer behaviors continued to shift away from goods into experiences and travel in the first part of the year, and even though wages largely increased in 2024, consumers were value-conscious, looking for deals and savings on everything from weekly groceries to apparel, Moody’s noted.
The number of retailer bankruptcies was higher in 2024 and 2023 as excessive inventory plagued retailers large and small. Moody’s reports that discretionary retail categories largely dominated the distressed list leading to bankruptcy filings from Bed Bath & Beyond, Conn’s, Big Lots, Joann stores, 99 Cents Only Stores, True Value and Rue 21.
With bankruptcy comes store closings. Clothing retailer Rue 21 filed for bankruptcy protection three times since 2002 and announced in May it was closing all 540 locations. In April, 99 Cents Only Stores announced the closures of 341 stores — some locations were taken over by competitor Dollar Tree.
Texas-based Conn’s HomePlus said in August it would shutter all of its 170 stores in the wake of bankruptcy and mounting debt. Discounter Big Lots recently announced plans to shutter all of its 1,300 stores following a Chapter 11 bankruptcy filing in September. But in late December, Big Lots announced an agreement with Gordon Brothers that would allow Variety Wholesalers to acquire between 200 and 400 of its stores that would operate under the Big Lots banner. The deal is subject to bankruptcy court approval.
“The strategic sale to Gordon Brothers and the transfer to Variety Wholesalers is a favorable and significant achievement for Big Lots that reflects the tireless work and collective effort of our team,” Bruce Thorn, Big Lots’ president and CEO, said in a release. “This sale agreement and transfer present the strongest opportunity to preserve jobs, maximize value for the estate and ensure continuity of the Big Lots brand.”
Party City filed bankruptcy just before the end of 2024, its second filing in two years. This time the business is shuttering all corporate-owned stores like the one in Rogers, set to close on Feb. 28. The locations owned by franchises such as the Fayetteville store will remain open. Moody’s analysts expect fewer retailer bankruptcies in 2025 saying that those at risk have already defaulted on their debt, and with rate cuts on the horizon, cheaper and more accessible funding should help retailers better manage debt.
However, Joann stores filed for bankruptcy in early 2025, its second filing since March 2024. Joann has been owned by its creditors since it exited bankruptcy in April 2024. The company now is seeking to sell all assets. The stalking horse bidder is Gordon Brothers, according to Retail Dive. The plan also calls for the closure of non-performing stores.
Moody’s said fewer retailers have weak capital structures to start 2025. In general, overall conditions in the retail sector are expected to “remain stable.” The report states that while retailers have been reducing inventories and aligning them to match somewhat tepid demand, cash flows have also improved.
Moody’s analysts said cumulative inflation and elevated household debt are straining low-income consumers, and a cooling labor market poses the risk of a pullback in discretionary spending that will eventually spread to higher-income households.
STORE GROWTH
The National Retail Federation said with brick-and-mortar stores still accounting for 82.9% of all U.S. retail sales, retailers of all sizes are still adding stores in 2025.
Deep discounter Aldi recently announced it will open 800 U.S. locations by the end of 2028. It aims to achieve this by not only building new stores but also by converting former Winn-Dixie and Harvey Supermarket stores. Aldi will open 50 converted stores in 2025. Aldi’s parent company, Trader Joe’s, has planned to open 12 new U.S. stores this year. Trader Joe’s, which has more than 550 stores, is evaluating more than 1,000 possible locations to see which has the best chance of succeeding.
“With such a deliberate process and so much time and energy behind it, none of this is casual. We’re not just flippantly opening a store location to see if maybe that works and then closing it a few years later. This is very deliberate, and for us, what’s important is that it’s controlled growth,” said Matt Sloan, marketing exec at Trader Joe’s.
Discretionary retailers like Academy Sports + Outdoors said it plans to open between 20 and 25 stores in 2025 with a long-term goal of hitting 800 stores. Boot Barn plans to add 60 stores this year, delivering on its 15% annual growth target. Book retailer Barnes & Noble said it plans to open 60 stores this year, expanding on the 57 U.S. stores it opened in 2024.
Off-price retailer Burlington plans to open 100 new stores in 2025 in line with its goal to reach 500 new locations between 2024 and 2028. Mass retailers Costco and Walmart each have said they plan to open new stores in 2025. Costco reports 29 new stores, and Walmart will build nine, with six being supercenters and three in the Neighborhood Market grocery format.
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics, and is sponsored by HRG.