Shoppers across the country are noticing the same thing: more “store closing” signs than ever before. By June, retailers had already shut down nearly 6,000 stores, 67% more than this time last year, according to Coresight Research. The scene is hard to miss: empty shelves, quiet parking lots, and boarded-up storefronts.
Behind every closure are lost jobs and struggling communities. In some places, essential services like pharmacies are disappearing too. With retail changing so fast, many wonder what’s behind the collapse. The answer isn’t simple, but it starts with a combination of economic pressure, shifting habits, and a flood of tough choices.
Why Are So Many Stores Closing This Year?
The spike in store closures isn’t driven by a single cause; it’s a mix of mounting challenges. Inflation is tightening budgets, while online giants Temu and Shein reached 44% and 31% of U.S. adults, respectively, by January. Many retailers still face debt, supply chain setbacks, and pandemic overexpansion.
In 2024, 56% of large U.S. corporate bankruptcies involved private equity-backed firms. Coresight Research expects up to 15,000 closures in 2025, more than double the 7,325 in 2024. CEO Deborah Weinswig says rising prices and online bargain-hunting are hitting stores hard. Traditional retail is being squeezed from nearly every direction.
Big Names Are Disappearing Fast
Even major retail names aren’t being spared. Party City announced in December 2024 it would close all 700+ stores after its second bankruptcy, with CEO Barry Litwin telling staff the company was “winding down” immediately.
Big Lots filed for Chapter 11 in September 2024 and aimed to close all 1,400 locations before a January 2025 deal saved 200–400. Macy’s is closing 66 stores in 2025 as part of a plan to shutter 150 by 2026. CVS is closing 270 stores this year, and Walgreens plans to close 500. Coresight Research projects 15,000 total closures in 2025 alone.
Shelves Full, Warehouses Packed, But No Buyers
As stores continue to close, retailers are still wrestling with massive inventory problems. During the pandemic, many overordered, expecting strong demand to continue. But when spending habits changed, they were left with too much stock. McKinsey reported that U.S. retailers held about $740 billion in inventory by the end of 2022, a 12% jump from the year before. This surplus led to higher costs, packed warehouses, and deep discounts. Though inventories have since leveled off—reaching around $802 billion as of April 2025—the struggle to balance supply and demand remains a tough challenge in today’s unpredictable retail market.
Twice As Many Stores Are Closing As Opening
For every store opening in 2025, nearly two are closing. As of June 27, there have been 5,822 store closures compared to 3,960 openings, according to Coresight Research’s mid-year report. Even with 5,800 new stores projected by year-end, CEO Deborah Weinswig says it won’t offset the damage.
CoStar, using Coresight data, estimates that 123.7 million square feet of retail space has already disappeared, equivalent to dozens of shopping centers. This isn’t just a slump. It’s a sweeping reset. With 15,000 closures projected for 2025, double last year’s total, the way Americans shop is shifting faster than retailers can keep up.
Whole Communities Are Losing Access to Essentials
Store closures are hitting communities hard. In low-income areas, losing a CVS or Walgreens often creates a “pharmacy desert”, places with no pharmacy within a mile for drivers or half a mile for non-drivers. Health Affairs reports closure rates reached 37.5% in Black neighborhoods and 35.6% in Latino areas, compared to 27.7% in White communities.
Ohio now has 2 million residents in pharmacy deserts, up from 1.6 million in 2021. In Minneapolis, seniors rely on neighbors for rides to distant pharmacies. As Boston University’s Megan Cole Brahim warns, these shutdowns disrupt healthcare, not just business, cutting off vital access and connection.
Are Struggling to Keep Up
It’s not just the big brands struggling; small businesses are also in serious trouble. Over half of independent retailers have considered shutting down, according to a Spring & Autumn Fair survey. Rising rents, up to 25% in some areas per Bank of America, are hitting hard, along with falling foot traffic and online competition.
Brandon Svec of CoStar Group warns that home goods, crafts, and mid-priced clothing stores are especially at risk in 2025. Most small shops have only one location and fewer than five employees, making it harder to adapt. Inflation remains the top concern for 62% of small business owners, threatening the future of local retail.
Why Store Closures Aren’t Hurting Every Mall
Despite all the closures, retail real estate isn’t in total crisis. In fact, vacancy rates are holding steady. JLL says national retail vacancy is between 4.1% and 4.8%, close to historic lows. That’s because not all space is created equal. Popular locations are still attracting new tenants quickly, while less desirable areas remain empty.
R.J. Hottovy from Placer.ai explains that some closures are strategic, helping brands refocus rather than collapse. It’s a split-screen moment: one part of retail is thriving, while the other struggles. For now, demand remains high for strong retail spots in busy neighborhoods and shopping districts.
Budget Stores Are Booming as Prices Climb
As major chains shut down, discount retailers are expanding fast. Dollar General plans 575 new stores this year, Five Below is adding 150, and Aldi is opening 225, its biggest U.S. expansion ever, according to official company statements. TJX Companies is launching 130 global locations, including 40 new T.J. Maxx and Marshalls in the U.S.
Burlington is adding 100 stores. Northmarq’s Lanie Beck says these brands are thriving by meeting demand for low prices. Euromonitor reports that 64% of U.S. shoppers traded down in 2024, signaling a shift in shopping habits as more people prioritize value over brand names.
What the Future of Shopping Could Look Like
The shakeup in retail isn’t over. In fact, it’s just starting. With up to 15,000 closures expected this year, the pressure is on for cities, landlords, and retailers to rethink what comes next. Some stores are being turned into clinics, apartment buildings, or delivery hubs. Others sit empty, gathering dust.
Neil Saunders of GlobalData says this is more of an adjustment than a total collapse. Physical stores still matter, but they’re going to look different. The big question now is whether retail can evolve fast enough to meet a new kind of shopper: digital-first, budget-minded, and more selective than ever.