Retail apocalypse: 3,200 stores in the U.S. set to shut by end of year
America’s retail apocalypse is gathering pace with as many as 3,200 stores set to shut for good by the end of the year. Bankrupt brands like Bed, Bath & Beyond, Rite Aid pharmacy, and Tuesday Morning are shuttering hundreds of branches, while household names including Gap, Target, and CVS are closing major city stores as part of ‘restructuring’ projects.
A staggering rise in shoplifting rates, low store inventory, and a switch from in-person shopping to the online sphere are among the chief causes behind the slow death of the shopping mall in 2023. This comes despite a gradual rise in retail sales in the US overall – with the sector raking in $7 trillion in 2022 – up from $6.58 trillion in 2021 and $5.58 trillion in 2020, per Statista . At least 20 major brands have announced closures which will take effect by the end of 2023, at a combined total of 3,193 locations, according to Insider.
This includes 896 Bed, Bath & Beyond stores after the beleaguered brand went bankrupt and retreated to an online-only marketplace under the new leadership of Overstock.com. Foot Locker is also closing 420 stores by 2026 as part of a scheme to ‘reset’ the company – with plans to open more than 300 ‘new concept’ stores over the same period. Pharmacies are not immune to the retail apocalypse, including Rite Aid which has said it’s likely to close at least 400 of its 2,100 drugstores as part of a bankruptcy deal with creditors, according to the Wall Street Journal.
Competitor CVS is in the second year of a three-year proposal to cut 900 stores by the end of 2024 , turning to the digital marketplace instead. Walgreens is also closing 150 of its 9,000 US stores, along with 300 more in the United Kingdom. Target is among the most recent big names to announce the closure of flagship stores in major cities across the US including New York, Seattle, and San Francisco due to an uptick in crime.
Retailers lost almost $80 billion to shoplifters last year – an increase of nearly $13 billion compared with 2021 – amid a frightening rise in violent thefts , particularly in Democrat-led cities. The National Retail Federation said the sector is under an ‘unprecedented’ threat from crime and violence, with store owners fearing for their livelihoods as well as their safety. The annual trade survey collected data from 177 brands across the country, accounting for more than $1.6 trillion of annual sales.
‘Retail crime, violence, and theft continue to impact the retail industry at unprecedented levels,’ the report stated. ‘The effects of these criminal acts are not isolated to large national brands or large metropolitan cities. Daily media reports show that no business is immune, and these issues touch retailers of all segments, sizes, and locations across the United States.’ Rising crime rates are also responsible for 70 percent of ‘inventory shrink’ – which is unaccounted losses of stock – with the remainder due to administrative errors, vendor fraud, and damage.
According to a recent survey by the National Retail Federation, inventory shrink cost American retailers an estimated $112 billion in 2022 , or around 1.6 percent of their total sales. Rising crime could also be driving the trend toward online shopping rather than in-store. Online retail sales in the United States are projected to rise exponentially over the next few years, online with the current trend toward digital purchasing.
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