Quick Hit: 

Retailers are closing nearly 3,200 stores this year, a 24% increase from 2023, as more companies cite inflation and high costs for their bankruptcies and shutdowns.

Key Details: 

• Nearly 3,200 store closures in 2024, up 24% from last year.
• Major closures include Family Dollar, Tupperware, and Rue21.
• Inflation and retail theft are primary reasons for the closures.

Diving Deeper: 

The retail sector is facing a significant downturn, with nearly 3,200 stores expected to close in 2024, marking a 24% increase from the previous year. This surge in closures is attributed to mounting inflation and escalating costs, forcing many companies into bankruptcy or operational shutdowns.

A recent analysis by CoreSight Research reveals that U.S. drug stores and pharmacies have led the way, resulting in 8 million square feet of shuttered retail space. Additionally, the research highlights that retailers are struggling with inventory loss and declining customer bases due to increasing incidents of retail theft, often linked to organized retail crime.

Among the hardest hit are 30 major retailers, with Family Dollar leading the pack, closing over 600 stores. Tupperware recently announced the permanent closure of its last U.S. production plant in Hemingway, South Carolina, resulting in the layoff of 148 workers, with closures beginning in September and continuing through January. Tupperware will shift its production to a plant in Lerma, Mexico.

Teen apparel retailer Rue21 also filed for bankruptcy last month, planning to close all 540 of its stores and laying off 4,900 employees due to underperforming locations, inflation, and broader economic challenges. Similarly, the discount chain 99 Cents Only filed for bankruptcy in April, citing prolonged difficulties in the retail environment and will close all 371 of its stores.

Other notable closures include CVS Health, 7-Eleven, Rite Aid, Express, Walgreens Boots Alliance, Macy’s, The Body Shop, Soft Surroundings, Burlington stores, Foot Locker, Carter’s, Big Lots, Dollar General, Abercrombie & Fitch Co., Best Buy, and more, according to CoreSight's analysis.

The trend of store closures is a continuation from 2023, where many retail, pharmaceutical, and fast-food chains declared bankruptcy or shut down locations to cut costs amid inflation and profit losses. This year began with Macy's leading the wave of closures, reflecting ongoing economic strains.

Inflation's impact extends beyond retail, affecting car insurance rates, which surged 26% nationwide in a year and are expected to remain high until 2025. Potential home buyers are also feeling the crunch, needing 80% more income to purchase a home in 2024 compared to 2020.

Grocery prices have also soared, with food inflation leading to higher costs and smaller portions, a phenomenon known as shrinkflation. The Wall Street Journal noted it has been 30 years since food consumed this much of Americans' income.

Former Home Depot and Chrysler CEO Bob Nardelli predicted more layoffs due to high-interest rates, which he says are "killing" middle and lower-market companies. Economist David Rosenberg warned of a default cycle, citing record-high credit card debt of $1.13 trillion and rising delinquencies on credit card and auto loans.

A recent The Center Square Voters' Voice Poll indicates that inflation and the economy are top concerns for voters across all political affiliations, with 45% citing inflation and price increases as their primary worry and 24% focusing on the economy and jobs.

"Inflation is a high-ranking issue among Democrats, Republicans, and True Independents," said David Byler of Noble Predictive Insights. "Every political group thinks this matters."