If you've taken a trip to your local shopping mall, suburban plaza, or even just a tour down main street recently, you've probably noticed some changes.
For one, there seem to be a lot more national (or even multinational) retailers and restaurants around.
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Brands like Target, Walmart, large chain grocery stores and other big box stores are now the norm, edging out smaller mom and pop operations. The same goes for chain restaurants replacing smaller, localized cafes and eateries.
Another trend you might notice is the sheer number of vacancies. Unless you live in an area that's experiencing a great deal of population influx that's trying hard to keep up with popular needs, it's likely that you're seeing more shops closing down than opening up.
These impacts are felt particularly hard for smaller businesses. When a smaller operation is competing against big multinational corporations, they tend to have less leverage -- or pricing power to win deals and shoppers.
They're then driven out of more areas and have less access to capital. This creates a sort of doom loop scenario, where they can't gain a foothold in most markets and are consolidate locations just to survive. Or, they simply pack up shop and accept defeat.
Image source: Shutterstock
Retail is more competitive
Unlike in the past, where there was more market share to be divvied up by more brands, modern retail has changed quite a bit in recent years.
COVID-19 brought this about most rapidly, but the wheels were already in motion prior to the pandemic.
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Shopping malls were going out of style, with many shoppers instead opting to shop for deals at outdoor outlet malls, strip malls that were closer in proximity to them, or online, where they didn't need to leave the house at all.
Many folks also began to opt to shop at fewer stores, where they could get most of their shopping done in a shorter period of time. These are stores we all know well, the aforementioned Target and Walmart, provide almost everything a modern family needs on a weekly basis nowadays; most big box stores now boast pharmacies, grocery options, apparel, pet stuff, school supplies, and plenty more.
Retail will continue to consolidate
And one prediction shows that retail will continue to change.
According to a new report by Coresight data analyst Aaron Mark Dsouza, store closures are only going to accelerate in 2025.
The report predicts that up to 15,000 stores could close this year, with 334.3% more closures announced for 2025 compared to the same time just one year prior.
And much of this has to do with bigger corporations having more sway, leaving less opportunity for smaller operations.
“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 CEO Deborah Weinswig said of the findings.
“Retailers that were unable to adapt supply chains and implement technology to cut costs were significantly impacted, and we continue to see a trend of consumers opting for the path of least resistance. Not only do they 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."
Coresight breaks down the predicted closures into three categories, which include:
- Liquidations, with all stores shuttering
- Chapter 11 bankruptcies, with retailers closing most or many stores
- Total remakes, with large retailers doing complete pivots on strategy and footprint
2024 saw the largest number of store closures since the pandemic, but Coresight does not expect this trend to slow. Fully 7,325 major retail stores closed in 2024, with 2025 potentially almost doubling that figure.
Coresight estimates 15,000 stores could close in 2025, while approximately 5,800 stores may open. This leaves about 10,000 open and unoccupied.
