U.S. Retailers Face Surge in Store Closures: 2025 Set to See Record Shuttered Locations

Major retailers like Party City, Walgreens, and Macy’s are closing thousands of stores as they adapt to shifting consumer habits.

NEW YORK — Store closures in the U.S. reached alarming levels in 2024, with major retailers closing 7,325 locations—the highest since the pandemic. According to an analysis by Coresight Research, this trend is expected to continue into 2025, with 1,925 closures already announced as of January 10. The retailers closing the most stores include Party City, Big Lots, Walgreens Boots Alliance, 7-Eleven, and Macy’s.

Retail experts predict that the total number of closures for the year could hit 15,000 as traditional retailers grapple with the shift in consumer spending, with industry giants like Amazon, Costco, and Walmart gaining ground. The closures reflect a larger divide between successful retailers and those struggling to maintain relevance in a rapidly evolving market.

A significant contributor to last year’s high closure rate was an uptick in bankruptcies. Coresight’s data shows 51 retail bankruptcies in 2024, nearly double the 25 seen in 2023. Companies such as Party City and Joann have been among those affected, with Party City expected to close many of its stores in 2025.

Despite these closures, consumer spending remains robust. Holiday sales for the period between November 1 and December 31, 2024, rose 4% year-over-year, amounting to $994.1 billion, according to the National Retail Federation. However, the spending is increasingly concentrated among a few industry winners, leaving many smaller chains behind.

Specialty retailers, including Big Lots, Joann, and The Container Store, have particularly struggled. The Container Store filed for bankruptcy protection in December, and Big Lots has begun going-out-of-business sales across its locations. Meanwhile, Dollar Tree-owned Family Dollar, CVS Health, and other legacy chains like Conn’s and rue21 have also experienced significant closures.

John Mercer, Coresight’s head of global research, attributes the closures to competitive pressures rather than a decline in consumer demand. “Retailers closing stores are often those that cannot adapt to fast-changing consumer preferences,” Mercer explained. Some companies are trimming their footprints after filing for Chapter 11 bankruptcy, while others, such as Walgreens and CVS, are downsizing to adjust to new shopping habits.

Macy’s is also in the midst of reducing its footprint. The department store giant plans to close around 150 locations by early 2027, focusing on smaller stores and its better-performing brands, including Bloomingdale’s and Bluemercury. This move aligns with broader shifts in the retail landscape, where larger stores are struggling to compete with e-commerce giants and smaller, specialized retailers.

The rise of e-commerce and shifting consumer habits have intensified the challenges for traditional brick-and-mortar retailers. International e-commerce platforms like Shein and Temu have also siphoned off significant sales, with an estimated $100 billion in combined revenue in 2024. This has contributed to the struggles of retailers like Party City and The Container Store, who are facing declining sales in the wake of increased competition.

Despite these challenges, the number of new store openings has surged. In 2024, 5,970 new retail locations were opened—the highest number since Coresight began tracking openings and closures in 2012. Retailers like Aldi, JD Sports, Burlington Stores, Pandora, and Barnes & Noble have led the charge in opening new stores, signaling a potential rebound in the industry.

Looking ahead, the retail landscape is set for further disruption. As consumers continue to flock to the most convenient and value-driven options, legacy brands will need to innovate or risk being left behind. Retail analysts expect that store closures will outpace openings in the U.S., as larger chains leverage their e-commerce platforms to capture a larger share of the market.

Despite the closures, there is some optimism. Coresight projects that around 5,800 new stores will open in 2025, maintaining a steady pace of expansion. However, the gap between the winners and losers in the retail space continues to widen, reshaping the industry for years to come.