Walking through my neighborhood strip mall the other weekend, I saw a closed Family Dollar, its sign worn, a silent victim of 2024’s retail upheaval. More than 3,200 physical stores are scheduled to shut down this year, a 24% increase from 2023, with projections indicating 8,000 at year-end a 40% rise. Inflation, e-commerce’s reign, and frugal consumers are transforming the retail scene. Let’s take a look at 12 chains spearheading this shutdown wave, examining their troubles and tactics.
1. Family Dollar & Dollar Tree
Dollar Tree’s parent, Family Dollar and Dollar Tree, is cutting more than 600 Family Dollar locations in the first half of 2024, in addition to 370 when leases run out, and 30 Dollar Tree stores. I would pick up bargains at my neighborhood Family Dollar; its departure created a void. The action comes after a Q3 miss in sales in 2023, with projections falling to $30.5–$30.7 billion from $30.6–$30.9 billion.
Family Dollar’s 2% comp-store sales growth trailed Dollar Tree’s 5.4%, undermined by inflation and theft. CEO Rick Dreiling, during a November 29 earnings conference call, stressed closing underperforming stores to support their “transformative vision” for profitability. The 620 closings, according to CoreSight, are designed to simplify operations and increase shareholder value.
This approach is a harsh truth for discount stores: razor-thin margins can’t withstand financial stress. Consumers such as myself now scour bargains online or at competitors. Tip: Scour closing Family Dollar stores for clearance prices before they disappear.
2. Rue21
Fashion chain Rue21 is shutting down all 543 U.S. locations after it filed for Chapter 11 bankruptcy. My cousin adored their budget tees, but the Rome, New York, closure was a blow. Neil Saunders comments on Rue21’s prolonged troubles that have worsened following bankruptcy.
Fast-fashion giants like Shein and shifting consumer tastes crushed Rue21’s model, which targeted younger shoppers. The May announcement marks the end of its physical presence, a stark reminder of apparel retail’s volatility. Malls, once Rue21’s home, are losing anchors as online shopping thrives.
These closures leave communities reeling, with empty storefronts signaling change. Rue21’s exit underscores the need for agility in retail. Insight: Specialty apparel must evolve fast to survive digital competition.
3. 99 Cents Only Store
The 99 Cents Only Store is closing 371 stores in 2024, a huge blow to the dollar discount chain. I used to pick up household items there for pennies, but inflation’s effect on thin margins made it difficult. Increased costs of goods and labor undermined their value proposition.
Pressure was fueled by Dollar General and internet discounters. Fixed-price concepts suffer when suppliers increase prices, pinching profit margins. Closures by the 99 Cents Only Store are evidence of a wider threat to discount retail during an inflationary economy.
The extent of this contraction argues for a desperate change of direction to stay alive. Customers might shop rivals or the internet for bargains. Reflection: Ever used a dollar store for cheap purchases?
4. CVS Health
CVS Health is shutting down 900 stores by 2024, at 300 annually since 2021, with 315 scheduled for 2024. My neighbourhood CVS closed, sending me to their app for refills. With 9,437 U.S. stores, fewer than 9,600, CVS is simplifying its footprint.
The chain weighs access in community pharmacies against market forces such as population movement. Closures in Iowa and Florida are strategic reductions to maximize efficiency. CVS’s response to the Tallahassee Democrat underscores preservation of access to service amidst closures.
This transformation demonstrates pharmacies evolving to meet digital health and affordability trends. Consumers like me evolve too, combining online and in-store solutions.
5. 7-Eleven
7-Eleven is shutting down 272 stores and opening more than 270 new stores, a bold reorientation. My late-night Slurpee grabs could be redirected to newer locations. This “survival of the fittest” strategy looks for underperforming locations for high-traffic zones.
Drivers of closures include expiring leases and shifting demographics, with new stores focusing on expanding markets. 7-Eleven’s two-pronged strategy keeps the number of stores stable while driving profitability. Convenience stores live and die on location, and 7-Eleven’s wagering on smarter locations.
Such balance is evidence of flexibility in a competitive business environment. Grab-and-go demand makes 7-Eleven continue to be relevant.
6. Rite Aid
Rite Aid’s October 15, 2023, Chapter 11 bankruptcy prompted 165 store closings in 15 states. A $3.3 billion debt and a DOJ suit for improper prescriptions added to six years of deficits, according to Neil Saunders. My in-town Rite Aid’s closure pushed me to a competitor.
California and Pennsylvania each lose 31 and 39 stores, respectively. The reductions are intended to eliminate money-losing locations and stabilize profitability. Rite Aid’s legal challenges put additional pressure, wearing away consumer confidence.
The chain’s fight is an example of how debt and legal affairs can decimate retail. Consumers will potentially have a longer ride for prescriptions. Reflection: How do legal issues diminish your confidence in a retailer?
7. Express
Express is shutting down 100 of its 500 stores after Chapter 11 bankruptcy, of which 105 are listed by Core Sight. Neil Saunders attributes their inability to respond to the effect that remote work has had on office fashion. I adored their blazers, but vacant offices curbed demand.
The closure of Sanger town Square Mall mirrors apparel’s overall downturn. Express’s gradual shift toward casual styles left it exposed to fast-fashion rivals. Bankruptcy demands painful retooling to reduce overhead.
These closures mean that fashion retailers need to be nimble. Consumers can pick up bargains online during liquidation.
8. Walgreens
Walgreens is closing 77 U.S. stores in 2024, part of 150 domestic closures by August 2024, despite an 8.6% Q3 2023 sales rise. CFO James Kehoe cited missed earnings, prompting location optimization. I’ve seen my local Walgreens streamline.
With 9,000 U.S. locations, Walgreens offsets closures with digital health spending. Market dynamics and store density are among the factors that inform decisions. This action is expected to improve profitability in a saturated pharmacy market.
Shoppers will have to change habits, but Walgreens’ app makes the transition smoother. Insight: Pharmacies are embracing digital to remain competitive.
9. Macy’s
Macy’s is closing 51 stores in 2024, part of 150 by 2026, while renovating 350 flagships. The Sanger town square closure disrupted my holiday shopping ritual. The chain’s luxury bets with 15 new Bloomingdale’s and 30 Bluemercury locations.
The strategy opposes online competition and changing consumer behavior. Improved staffing and visual displays are designed to recapture the department store experience. Macy’s shift reflects a mix of contraction and reinvestment.
Competitors such as TJX might capture market share, but Macy’s is pushing back. Reflection: Do department stores continue to bring you joy?
10. The Body Shop
The Body Shop is shutting down 51 U.S. stores in 2024, showing beauty retail’s vulnerability Digital competitors such as Sephora’s website and inflation-strapped consumers trimming non-essentials damaged sales. I adored their socially conscious feel, but e-commerce is victorious.
These closures signal a shift to online sales to survive. Inflation makes beauty products a tougher sell, pushing consumers to cheaper alternatives. The Body Shop’s contraction highlights the need for digital agility.
Shoppers can stock up on favorites before stores vanish. Tip: Check their website for deals as stores close.
11. Soft Surroundings
Soft Surroundings, a specialty women’s apparel and home goods retailer, is shutting down 43 locations. My aunt loved their snuggly sweaters, but Shein and the pinch of inflation slammed it. These closures are indicative of the woes of specialty retail.
The shift to online shopping and prudent spending on discretionary items necessitated this move. Soft Surroundings will likely enhance its online platform to stay afloat. Specialty retailers have to be agile or else become extinct.
This contraction makes fans look elsewhere online. Insight: Specialty retailers require robust online strategies to contend.
12. Sleep Number
Sleep Number is shuttering 40 stores, a sign of being cautious with high-ticket items. Economist Jeffrey Roach points out inflation and exhausted savings dampen spending. I held back at their price for mattresses, mirroring consumer trends.
High costs to showrooms and online shopping behaviors fuel these store closings. Sleep Number’s retrofitting is aimed at profitable stores to improve efficiency. High-ticket retail is subjected to special stress in this economy.
Consumers are able to compare bargains online prior to purchasing. Tip: Read reviews in order to make big purchases worthwhile.
Making Sense of the Retail Shift
The 2024 store closings more than 3,200 and rising tell the tale of an industry adapting. From Family Dollar’s calculated reductions to Rue21’s complete departure, these 12 chains indicate how inflation, online shopping, and consumer changes compel adjustment. My own local losses hurt, but retailers are making the changes to stay alive. As consumers, we hunt for bargains online or hold onto what remains, demonstrating retail’s transformation is far from over.
