As a “retail apocalypse” sweeps the United States, tens of thousands of stores are expected to shut down. This comes as we recently learned that all the Bed Bath and Beyond stores, along with Tuesday Morning stores, will be closing this year. This is in addition to the 2,000 that have already closed this year.
Currently, there are approximately 940,000 brick-and-mortar stores in the United States. Wall Street analysts conservatively predict that 50,000 stores will permanently close doors within the next five years. However, if the economy continues heading towards a prolonged recession, the number could reach upwards of 90,000 stores by 2027.
Small business owners with less than 500 employees are likely to bear the brunt of these hardships. Without these small companies, an estimated $210 billion in retail sales is up for grabs to stores still in business.
While this sounds promising for larger corporations, even long-standing businesses are feeling some pressure to shut down some locations or even fold their companies entirely.
This week, Bed Bath & Beyond filed for bankruptcy. The company had been struggling since 2004 to recover stock while trying to maintain any profitable revenue from stores. The company had spent $11.8 billion in a misguided repurchase attempt to finance share buybacks to improve stock performance yet share prices plunged from $16.04 in in 2022 to 29 cents a share in April of 2023.
Walmart also is facing more store closures. The company has been shutting down a small number of stores in recent years due to financially underperforming. Walmart recently announced 20 more store closures in addition to shuttering two experimental pick-up-only locations in Illinois and Arkansas, as well as five e-commerce fulfillment centers.
While hundreds of people will soon be out of a job at Walmart, Target is taking a different approach to closing stores, albeit it has announced shutting down four locations so far. Most employees at these locations will be transferred to different stores with more foot traffic.
“The decision to close one of our stores isn’t something we take lightly. It’s an action we take only after multiple years of working to improve performance,” says Target spokesperson Kayla Castañeda.
As 2027 looms ever closer, analysts seem to agree there will be 5 percent fewer retail locations across the United States.