The number of store closures in the U.S. in 2024 was the highest since the pandemic started. The alarming part is that even more are expected to shut down this year. The question is, why are so many businesses closing down? Keep reading to find out.
Why Many Businesses Are Closing Down
Many businesses closed down in 2024, and more store closures are expected this year because of a shift in consumer behavior. According to a Coresight Research report, many people spend their money at only a few big stores.
In 2024, big retailers like Party City and Macy’s closed 7,325 stores. This was the biggest jump in closures since 2020. That year, nearly 10,000 stores shut down during the first year of the COVID-19 pandemic.
This trend will continue in 2025. By January 10, retailers had already announced 1,925 store closures. The five companies closing the most stores so far this year are Party City, Big Lots, Walgreens, 7-Eleven, and Macy’s.
Coresight predicts that about 15,000 stores will close by the end of 2025. Many older or struggling brands are shrinking or opting for bankruptcy protection, and this often leads to more store closures. This shows a big gap between the stores doing well and those not doing as well.
Big names like Amazon, Costco, and Walmart are getting more popular because they offer low prices and convenience. On the other hand, smaller chains and specialty stores are having a hard time staying open. Most of them are closing some locations.
One reason for so many closures in 2024 was the rise in bankruptcies. There were 51 retail bankruptcies last year, compared to 25 in 2023. Some of those businesses, like Party City, are continuing to shut down stores this year.
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Stores in the U.S. That Are Closing the Most Locations in 2024 and 2025
In 2024, the stores that closed down the most locations were:
- Family Dollar: 718 closures.
- CVS: 586 closures.
- Conn’s: 553 closures.
- Rue21: 543 closures.
- Big Lots: 517 closures.
In 2025, the list changed a bit. The stores closing the most locations are:
- Party City: 738 closures.
- Big Lots: 601 closures.
- Walgreens: 333 closures.
- 7-Eleven: 148 closures.
- Macy’s: 51 closures.
Although people are still spending a lot of money shopping, especially during the holidays, the money is going to fewer stores. During the 2023 holiday season, from November 1st to December 31st, people spent $994.1 billion. This is 4% more than the previous year. This amount is similar to the amount people spent during the holidays before the COVID-19 pandemic. However, despite these numbers, not all stores are doing well.
Specialty stores are having a tough time. For example, Big Lots had to shut down all its stores after failing to sell the company. The Container Store filed for bankruptcy. Joann, a crafts and fabric store, also filed for bankruptcy this year, the second time in just one year.
It is not just smaller stores that are struggling. Some well-known chains are also closing stores. Family Dollar, and CVS shut down a lot of their locations. Rue21, which sells clothes for teens, and Conn’s, a store selling home goods, had to close all their stores after their parent companies went bankrupt.
John Mercer, Coresight’s head of global research, spoke about these trends. He said that the problem is not that people are buying less. He believes that competition is fierce, and some stores cannot keep up with what shoppers want or how they choose to shop now.
Mercer further explains that stores that are closing fall into three groups:
- Some, like Big Lots, are closing all their stores because they are going out of business.
- Others, like The Container Store, are closing many stores because of bankruptcy.
- Finally, stores like CVS and Macy’s are closing fewer stores because they are trying to adjust to what customers want.
For example, Macy’s is planning to shut down 150 of its big department stores across the U.S. by 2027. They are opening smaller stores outside of malls. The store will focus more on its successful brands, like Bloomingdale’s and Bluemercury, which sell beauty products. This shows how stores are trying to adapt to shoppers’ changing habits.
The Impact of Newcomers
New Chinese e-commerce stores like Shein and Temu are making it harder for older, well-known stores to stay successful. Coresight says Shein and Temu together made about $100 billion in sales last year. Most of this money came from shoppers outside the U.S.
More people in the U.S. are now using sites like Temu to buy things like party balloons or storage containers. This might be one reason why big stores like Party City and The Container Store went bankrupt last year. Even a slight drop in sales can be a big problem for traditional stores. This is because they have high costs like rent and wages to pay.
David Silverman, a retail analyst at Fitch Ratings, explained something. He said that when a big store like Macy’s closes in a mall, smaller stores nearby often shut down, too. Some malls and shopping centers are not replacing closed stores with other retailers. Instead, they are putting in things like gyms, medical clinics, or even apartments.
The Covid pandemic also changed where people live and shop. This has made some retailers rethink where they should open stores. Now, many companies are building fewer stores. Even dollar stores, which used to open lots of locations, are cutting back.
Silverman also said that more stores will likely close because companies are focusing on selling more online. Big retailers like Walmart can sell a lot from just one store. Smaller specialty shops, on the other hand, are closing multiple locations and still can’t compete.
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U.S. Retailers With the Most Openings in 2024 and 2025
In 2024, the stores that opened the most locations are:
- Dollar General with 754 new stores.
- Dollar Tree with 541 new stores.
- 7-Eleven with 295 new stores.
- Oxxo with 249 new stores.
- Five Below with 241 new stores.
In 2025, the top five are:
- Aldi with 170 new stores.
- JD Sports with 124 new stores.
- Burlington with 104 new stores.
- Pandora with 61 new stores.
- Barnes & Noble with 60 new stores.
When it comes to retail stores in the U.S., there is still good news. Last year, a record 5,970 new stores opened. This is the highest number since 2012 when Coresight started tracking store openings and closings. Experts predict that the number of new stores will stay nearly the same in 2025.