In 2024, the retail sector experienced significant upheaval, marked by the closure of numerous brick-and-mortar stores across the United States. The closures of major retail chains, provides a comprehensive look at the reasons, cited by store managers and corporate leaders, for these decisions.
The year began with a noticeable trend of store closures, with more than 3,100 stores announced for shuttering within the first five months alone, setting a pace for potentially over 8,000 closures by the year's end, an increase of over 40% from the previous year. Chains like Family Dollar, Dollar Tree, and apparel retailers like Rue 21 and Express were among those significantly impacted, with Family Dollar and Dollar Tree alone planning to close over 600 stores.[](https://bigfrog104.com/full-list-of-over-3000-stores-closing-their-doors-in-2024/)
The primary reasons for these closures, as articulated by retail managers, was the economic climate. Inflation rates continued to challenge consumers, particularly those with lower incomes, pushing them to cut back on discretionary spending or seek out more economical options. Managers from Family Dollar, for instance, highlighted the struggle to attract price-sensitive shoppers amidst a backdrop of rising costs for essentials and reduced government benefits. This led to a scenario where, despite an increase in foot traffic, there was a decrease in overall spending, as noted in reports from the Associated Press.[](https://bitly.com/blog/why-are-retailers-closing/)
The ongoing shift towards online shopping has been another pivotal factor in store closures. The convenience and breadth of options available online have been steadily eroding the traditional retail model. Managers at various chains, including Macy's, have acknowledged that their closures were part of a strategic realignment to focus on e-commerce, which offers better margins and reaches a broader customer base. The persistence of this trend was evident as more consumers reportedly shifted to online platforms, with the number of store closures directly correlating with this digital pivot.[](https://www.retaildive.com/news/5-retailers-closed-stores-2024/736232/) Amazon's Black Friday event, from November 21 to December 2, marked the company's biggest 12-day sales period, outshining any previous Cyber Monday results. With a total of $900 million in sales, Amazon accounted for about 17.7% of all Black Friday sales.
Retail crime, including shoplifting and organized theft, has surged, contributing to the decision to close stores. Managers from Target and other retailers noted a significant increase in theft incidents, which not only impacts profitability but also raises safety concerns for staff and customers. In response, some stores have opted to close rather than invest in additional security measures or cope with the ongoing risks. This issue was compounded by labor shortages, making it difficult for stores to maintain adequate staffing levels to manage both customer service and security.[](https://www.modernretail.co/operations/how-companies-are-rethinking-retail-theft-in-2024/) The Walgreens store at 275 Sacramento St. at the corner of Sacramento and Front Streets will close on Feb. 27, a company spokesperson told SFGATE via email. “When faced with the difficult decision to close a location, several factors are taken into account, including our existing footprint of stores, dynamics of the local market, and changes in the buying habits of our patients and customers, among other reasons,” the spokesperson said in a statement. (https://www.sfgate.com/local/article/downtown-sf-walgreens-closure-18625748.php)
Many closures were also part of strategic decisions to optimize the retailer's footprint. For instance, Macy's aimed to close underperforming stores to focus on more profitable locations or to expand smaller, more manageable store formats. Similarly, managers at Kohl's and other retailers spoke about reducing store sizes to lower operational costs while enhancing the in-store experience through technology like robots for cleaning and inventory management. This approach was seen as a way to adapt to new consumer behaviors and retail landscapes.[](https://www.cnn.com/2024/10/25/business/the-retail-apocalypse-is-back/index.html)
Bankruptcy filings were notably higher in 2024, with 45 retailers declaring bankruptcy, compared to 25 in 2023. Management teams from these companies often cited the need for financial restructuring as a reason for store closures. Big Lots and 99 Cents Only Stores, for example, went through bankruptcy proceedings, leading to decisions to close stores as part of broader financial recovery plans. The inability to secure new agreements or restructurings, as seen with Big Lots, directly led to the initiation of "going out of business" sales across their store network.[](https://www.retaildive.com/news/5-retailers-closed-stores-2024/736232/)[](https://www.aarp.org/money/budgeting-saving/info-2024/retail-stores-closing.html) The average credit card rate dipped slightly in 2024, from 20.74 percent at the start of the year to 20.27 percent (the lowest rate of the year) at last check. It peaked at 20.79 percent (an all-time high) in August. Credit card defaults skyrocketed last year. Up 50% from the same period in 2023 and the largest amount in 14 years. As an example, Capital One said that as of November, the percentage of its overall loans marked as unrecoverable reached 6.1%, up from last year's 5.2%.
The modern consumer expects a seamless shopping experience across both online and physical channels. Managers have noted that failing to meet these expectations in terms of product availability, pricing, and service quality can drive customers away, leading to closures. Retailers like CVS, Walgreens, and Rite Aid have struggled with this integration, facing closures due to an inability to adapt quickly enough to the omnichannel model demanded by today's shoppers.[](https://www.cnn.com/2024/10/25/business/the-retail-apocalypse-is-back/index.html)
The retail closures of 2024 paint a complex picture of an industry at a crossroads. Influenced by economic pressures, changing consumer behaviors, the rise of e-commerce, crime, strategic downsizing, and financial restructuring, these closures are not merely a sign of distress but also of adaptation. In 2022, retailers lost $112.1 billion to theft, fraud, and damages, according to the National Retail Federation (NRF) In 2020, the average shoplifting incident cost retailers $461.86. Stores catch shoplifters about 2% of the time, and the average shoplifter is arrested once out of every 100 incidents.
The cities most affected by organized retail crime in 2022 were Los Angeles, San Francisco, Oakland, Houston, New York, and Seattle. 58% of small business retailers report that current or former employees have stolen from their business.
Managers across various retail chains have articulated a clear narrative: the retail landscape is shifting towards a model that prioritizes efficiency, customer engagement across multiple platforms, and sustainability. As the retail sector continues to evolve, these closures might be seen as necessary steps towards a new retail reality, one where the physical store's role is redefined in the age of digital commerce.
The insights from these closures underscore the need for retailers to remain agile, continuously innovate, and perhaps most critically, listen closely to the evolving needs and behaviors of consumers. Whether this leads to a more resilient retail environment in the future remains to be seen, but 2024 has undeniably been a year of significant learning and adjustment for the retail industry.
