The retail landscape in the United States has become increasingly inhospitable for traditional brick-and-mortar stores, ushering in a wave of closures that many may have thought was relegated to the grim days of the COVID-19 pandemic. According to Coresight Research, a staggering 7,325 retail locations shuttered their doors in 2024 alone, a statistic that mirrors the alarming trend witnessed during the height of the pandemic when nearly 10,000 stores closed their doors. As we find ourselves in 2025, the closures have continued, with an additional 1,925 stores already on the chopping block as of early January. This relentless erasure of physical retail space raises critical questions about consumer behavior and the prevailing forces driving this decline.
Even amidst the tumult, there emerges a clear division in the retail sector: the victors versus the vanquished. While giants such as Amazon, Costco, and Walmart continue to flourish—capturing consumers’ attention with their value propositions—smaller and specialty retailers are hanging by a thread. This stark polarization sheds light on the undeniable shift in consumer preference toward convenience and savings, leaving many legacy brands scrambling to adapt. The closure of well-known chains such as Party City and Macy’s signals not just a decline in their business but reveals an unsettling reality for many markets.
Despite overall consumer spending holding strong—recording a 4% increase year over year during the crucial holiday season—it’s evident that this growth is being monopolized by a select few retailers. Those traditional companies failing to pivot their business models in line with evolving consumer preferences are facing an existential crisis, prompting their retreat from the saturated market. The reality is that even a slight dip in sales can have devastating effects on businesses burdened with high fixed costs, such as leases and labor, as highlighted by industry analysts.
The retail sector’s struggles aren’t just a result of changing consumer tastes; they’re exacerbated by an alarming rise in bankruptcies. In 2024, a record 51 retail companies filed for bankruptcy, a noticeable jump from the 25 recorded the year prior. Big players like Big Lots and the infamous Party City are left to contemplate their futures, as they reluctantly close significant portions of their stores as part of liquidation efforts or drastic downsizing. Retailers like CVS and Walgreens are not immune either, grappling with the pressures of adapting to rapid consumer shifts while managing substantial store closures as part of their adaptive strategies.
One cannot ignore the ever-increasing presence of international competitors that exacerbate the woes of American retailers. E-commerce juggernauts like Shein and Temu pose serious threats, with estimates suggesting they raked in around $100 billion combined last year, making it exceedingly difficult for traditional retailers to keep up. The allure of lower prices and convenience that these platforms offer cannot be overstated, as they lure consumers from established stores with ease.
The Impact on Real Estate and Community Landscapes
As retail giants retreat from physical stores, the ramifications extend beyond just mundane profit and loss statements; they ripple through local economies and communities. The closure of a major anchor store, such as Macy’s, often triggers a cascade of smaller retailer shutdowns as foot traffic dwindles. As shopping centers become graveyards of shuttered storefronts, they are increasingly repurposed into creative spaces, including urgent care clinics, fitness studios, or even apartment complexes. Such transformations showcase a desperate adaptation to shifting land-use priorities in the wake of declining retail.
Simply put, the physical