The recent headlines have been very disturbing: “15,000 Stores Will Close in America in 2025.” That’s a pretty big number and double the amount of stores that were estimated to shut down last year.
But like any top-line statement there’s always more to the story once you start to dig a little deeper. In fact, the outlook for physical retailing for 2025 is generally pretty positive even if there will be casualties.
First the bad news: Coresight Research, a consulting company that specializes in the retail field, put out this 15,000 estimate and they are usually pretty good at these things. So, yes a lot of stores will close this year, but that forecast doesn’t just include general merchandise retailers, the kinds of stores that buy fashion and home products. In that total are supermarkets, convenience stores, drug stores, gas stations, and all kinds of other retail formats that are marginal players in the sectors you specialize in. Plus, many of these closings are in retail nameplates that have already announced they are downsizing or going out of business completely, including brands like Big Lots and Party City. Still, let’s not forget, that’s a lot of individual stores.
But now look at the flip side. Coresight is forecasting about 5,800 store openings in 2025, which is in line with the past couple of years. Again, it’s barely a third of the projected closings but look at what this total includes: Ross Stores, 100; Burlington, 100; Five Below, 150; Dollar General, 575; Target, 50; Dick’s, 20; Ollie’s, 50; and TJX, 30. These are all big-time retailers responsible for moving a lot of merchandise. And there’s more out there, in the 30 to 20-store openings range.
None of this takes into account start-ups we may not have on radars yet or other channels like supermarkets where players like Aldi and Lidl who do sell general merchandise are expanding.
So, you have to look into the details behind any story, especially when it comes to the retail sector which has always had a lot of churn from year to year. This new year promises to have more of the same.