JCPenney, Macy’s, Joann: After a rough year of bankruptcies and store closings in 2024, retailers may face an even steeper uphill battle in 2025, experts say.
Just a month and a half into the new year, several companies with brick-and-mortar presences have planned sweeping 2025 closings, the largest of which include Party City, Big Lots and craft store Joann, which on Wednesday announced the impending closing of more than 500 of its roughly 800 stores nationwide.
For several national chains, 2024 was no kinder. From Walgreens and Red Lobster to Big Lots and Family Dollar, hundreds of retail locations went dark as part of a yearslong trend often attributed to the economic fallout from the COVID-19 pandemic and the prevalence of online shopping.
And experts say things aren’t looking up for 2025. In fact, closings are expected to skyrocket.
Store closings expected to be even worse in 2025
U.S. store closings totaled 7,325 in 2024, according to data collected by Coresight Research, a research firm specializing in retail and technology, the highest number since it recorded 10,000 closings in 2020. Paired with the 5,970 recorded store openings, the net loss ended up being 1,355 stores as of last month.
“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a toll on brick-and-mortar retailers in 2024,” Coresight Research CEO Deborah Weinswig said in a statement. “Last year we saw the highest number of closures since the pandemic … and we continue to see a trend of consumers opting for the path of least resistance.”
Things are expected to escalate significantly this year, according to the firm, which projected the shuttering of about 15,000 locations throughout the year offset by only 5,800 stores set to open. Coresight said major U.S. retailers have announced 334.3% more closings and 29.6% fewer openings compared with last year as of mid-January
In fact, it has already tracked more than 2,000 planned closings this year thanks to late 2024 and early 2025 announcements from brands like Party City, Big Lots, Kohl’s and Macy’s.
“This is not just about one company — it is a structural shift in the retail landscape,” Weinswig said. “As we have noted, retailers that fail to adapt to new consumer expectations and personalized marketing and merchandising are facing an existential crisis.”
“Not only do (consumers) want the best prices, but they also have no patience for stores that are constantly disorganized, out of stock, and that deliver poor customer service,” Weinswig said. “E-commerce giants like Shein and Temu are accelerating this decline, offering rock-bottom prices and instant access to products that once drove foot traffic to physical stores. Consumers no longer need to visit specialty retailers for fabric, craft supplies or home goods when they can order them online for less − often with next-day delivery.”
Is this the new ‘retail reality’?
Some categories are more at risk than others. In 2024, as Coresight notes, general-merchandise discount stores accounted for 1,754 of total store closings, or 23.9%, followed by apparel with 1,383 closed stores.
Coresight said it expects general-merchandise retailers of multiple types — from automotive to home and pet — will likely be the hardest hit in the coming tidal wave, along with stores like Macy’s and JCPenney, which are experiencing an increasing “flight from department stores.”
Weinswig sees Joann’s move to close more than half its locations as a sign of the pain across the retail space.
“Joann Fabrics’ announcement underscores a retail reality we have been tracking closely: 2025 is shaping up to be the worst year for store closures in recent history,” Weinswig said.
“We believe there is a significant place for physical retail, but it needs to adapt to today’s consumer. They don’t want to have any friction. They don’t want to wait in lines, they don’t want to have challenges with returns, they don’t want it to be hard to find product information.”
Retail needs to ‘revolutionize’ to survive, expert says
Weinswig believes companies can win customers back by getting creative and embracing new technologies like artificial intelligence to optimize prices and deliver better customer service.
She cited JCPenney’s recently announced plan to partner with Forever 21’s parent company, SPARC Group, to create a new company called Catalyst Brands as an example of “radical thinking that is being adopted in the sector” to win and keep consumers.
“My belief is that we will see a significant shakeout this year, and that retailers will take a step back, reassess and revolutionize the physical store environment,” she said.
Read more at usatoday.com.