The Shifting Landscape of Retail: A Year of Closures and Transformations

The retail sector in the United States is undergoing a significant transformation, marked by an alarming rise in store closures. According to Coresight Research, 2024 saw the highest number of closures since the pandemic, with major retailers like Party City and Macy’s shuttering a staggering 7,325 stores. This trend shows no signs of abating, as 2025 has already witnessed 1,925 announced closures by January 10 alone.

The closures reflect a stark dichotomy within the retail landscape. While some industry giants like Amazon, Costco, and Walmart continue to thrive, capturing a larger share of consumer spending, many smaller chains and specialty retailers are struggling to stay afloat. The data indicates that consumer spending remains robust, with holiday sales rising 4% year-over-year to $994.1 billion during the last quarter of 2024. However, a significant portion of this spending is being funneled toward a select few retailers, leaving others to grapple with declining sales and increased competition.

Bankruptcies have also surged, contributing to the high number of store closures. In 2024, there were 51 retail bankruptcies, a notable increase from 25 in 2023. Companies like Party City and The Container Store have been particularly affected, with many of their closures occurring in 2025. The retail landscape is shifting, and the closures are often a result of legacy brands shrinking their footprints or filing for bankruptcy protection.

John Mercer, Coresight’s head of global research, emphasizes that the competitive landscape, rather than a decline in consumer demand, is driving these changes. Retailers that are closing their doors typically fall into three categories: those in liquidation, those undergoing Chapter 11 bankruptcy, and those adjusting to rapidly changing consumer preferences. Macy’s, for instance, is in the process of closing approximately 150 stores by early 2027 while simultaneously opening smaller, more strategically located shops.

Emerging e-commerce players, particularly from China, are also reshaping the market. Companies like Shein and Temu have reportedly generated around $100 billion in sales last year, with many American consumers turning to these platforms for affordable products. This shift in consumer behavior has had a detrimental impact on traditional retailers, leading to significant financial repercussions.

The closures are not just limited to large chains; smaller retailers are also feeling the pinch. Specialty retailers have faced a particularly tough year, with The Container Store and Joann filing for bankruptcy protection. Analysts suggest that when major mall anchors like Macy’s close, it can trigger a ripple effect, prompting smaller retailers to exit as well.

Looking ahead, industry experts predict that more stores will continue to close than open in the U.S. Retailers are increasingly focusing on online sales for growth, while larger companies are capturing a greater market share. As the retail landscape evolves, investors will soon gain insight into which retailers are thriving and which are faltering, with many major companies set to release their holiday-quarter results starting in mid-February.

In conclusion, the retail industry is at a crossroads, facing unprecedented challenges and transformations. While some retailers are adapting and finding success, many others are struggling to keep their doors open in a rapidly changing marketplace. The coming months will be crucial in determining the future of retail in America as companies navigate these turbulent waters.