Unexpected Consequences of Major Chain Store Closures in 2024

"Closing Down" sign on a shop door.

The retail sector is confronting an unprecedented crisis with the rapid rise of e-commerce and a turbulent economy leading to a substantial increase in chain store closures in 2024.

At a Glance

  • 2024 saw a 69% increase in store closures in the United States.
  • Big Lots, CVS, and Family Dollar spearhead these closures.
  • 7,308 store closings were confirmed this year, impacting communities.
  • Despite challenges, some brands, like Dollar General, are expanding.

Wave of Closures Across Major Chains

In 2024, the retail landscape is undergoing a significant transformation with a marked 69% rise in store closures reported across the United States. Famed chains such as Big Lots, CVS, and Family Dollar are at the forefront of this closure trend. Coresight data indicates 7,308 confirmed store closings for the year, a rise by nearly 3,000 from the previous year.

Job displacement and vacant storefronts are becoming common in small towns and large cities alike. Family Dollar comes as a significant player in these closures, with 718 confirmed shut-downs. The chain’s parent company, Dollar Tree, outlined plans targeting up to 600 underperforming Family Dollar stores between March and June 2024.

Key Economic Effects

These closures reflect broader issues in the retail economy. Many businesses face challenges due to “high inflation” and “high interest rates,” which have significantly impacted revenue streams and consumer behavior. Companies such as Big Lots have resorted to restructuring efforts, citing bankruptcy difficulties.

The closures are not just a concern for the companies but pose a serious threat to local economies. Small businesses that once thrived on retail customer traffic must cope with changes in consumer habits while vacant properties contribute to lower property values and diminished community appeal.

Mixed Signals in Retail Growth

Despite the challenges, the retail outlook presents mixed signals. Expansion is underway for select chains, such as Dollar General and Dollar Tree, reporting new store openings. Conversely, some areas face “pharmacy deserts,” with CVS and Rite Aid among those reducing their presence significantly since 2019.

While 5,818 new stores opened this year, this number pales in contrast to closures, indicating a need for strategic recalibration by businesses to better align with emerging market trends. Companies will need to innovate and adapt to changing consumer preferences to survive and possibly thrive in the years to come.

Moving Towards Stability

As the retail environment reacts to these turbulent times, hopes remain for stabilization by 2025. However, ongoing closures are expected as retailers continue to adjust operations. Analysts point to cyclical store closure patterns following years of disruptions while also cautioning that structural issues within some chains go beyond immediate economic circumstances.

“However, many of the chains closing stores are those that have problems which go beyond the economy. Their propositions might not be right, their offers might not be what consumers want, and they might not have responded to competitive threats in the right way.” – Neil Saunders

Strategic planning and innovation will be essential as businesses strive to realign with market demands and boost their standing in the competitive retail arena. Whether through fresh marketing strategies, diversification of offerings, or even technological integration, the industry must evolve to meet the challenges and opportunities of the future.

Sources

1. US store closings up 69% in 2024 amid Big Lots, CVS, Family Dollar cuts

2. Retail, Chain Store Closures Have Surged 69% In 2024: Which Were Affected?

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