NEW YORK—Two years ago, in 2017, store closings were a big thing, which led to much discussion about the prospects for retail moving forward. But in 2018 the retail sector calmed down, and much of retail seemed well again as “the number of closings fell, even if more stores were still shuttering than opening,” according to a report by Quartz.com.
“But in 2019, U.S. store closures picked up again, spiking to their highest level in years,” the website noted, citing data from Coresight Research. As of Dec. 13, U.S. retailers had announced 9,302 store closings this year, more than the roughly 8,000 stores that closed in 2017.
Comparing the number of openings and closings, 2019 saw 4,930 more stores close than open, also representing a jump from the net closings of 2018 (1,959) and 2017 (2,970), Quartz noted.
However, much of the increase in store closings this year is the result of one retailer: shoe seller Payless, which announced early in 2019 that it would shut all 2,100 of its stores in the U.S. (Note that, among optical retailers, Shopko, Sears and Walgreens closed stores in 2019, 371, 210 and 174 locations, respectively, according to the Coresight Research.
While all retailers face their own individual challenges, those closing the most stores did share some challenges in common, Quartz noted. And “chief among them was that they didn’t adapt to ecommerce. Several of the chains remained dependent on physical stores, often in dying suburban malls, even as more consumers shopped online,” leaving them burdened with unproductive space, according to the Quartz report.
The stores didn’t change their offerings fast enough to suit shifting consumer tastes, which resulted in customers heading to competitors both new and established. In some cases, the companies also had to deal with debt from previous private equity transactions. “Even as the U.S. enjoyed a long run of economic growth, the pressure kept mounting, and finally became too much for these companies to bear in 2019,” Quartz noted.
On the flip side, though, Quartz noted that some retailers saw in 2019 “a lot of opportunity to expand. That seemed particularly true of chains serving budget-conscious consumers.” As the report noted, if a company has the word “dollar” in its name, there’s a good chance it opened stores in 2019.