For all of 2023, significant U.S. retailers announced plans to open about 5,890 new stores, down from about 7,860 announced openings for all of 2022, and announced plans to close about 4,070 stores, more than two times higher than the approximately 1,680 store closings announced in 2022 according to analytical work by The Daily on Retail, an investor-oriented consumer research platform.
The drop in opening announcements and jump in closing announcements reflect the tougher consumer backdrop after two very good years with the benefit from pandemic-related stimulus in 2021 and the benefit from excess pandemic savings in 2022, as well as the strong labor market in both years.
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The labor market is still very healthy, with historically low unemployment and continued growth in wages, but inflation reduced consumers’ discretionary income in 2023, spending shifted from goods back to services, excess savings were depleted somewhat, and there were concerns about a recession after a period of Fed interest rate hikes aimed at slowing the economy and lowering inflation.
There were also a number of marginal retailers that were “propped up” by stimulus and by landlord concessions during the pandemic that are now struggling financially as discretionary spending slows. This is well reflected in U.S. retail bankruptcies, which by The Daily on Retail’s analytical work tripled in 2023 to 28, including Rite Aid in the fourth quarter of the year.
Other high-profile retail bankruptcies last year included Bed Bath & Beyond, Party City, David’s Bridal, Rockport, Christmas Tree Shops and Tuesday Morning.
Collectively, the dollar stores, off-price retailers, discounters and warehouse clubs continue to open the most stores. They announced about 2,170 openings last year, or more than 35% of all announced openings.
That doesn’t even include Five Below, which said in March 2022 it would open 925-1,000 new stores by the end of its fiscal 2025.
Other retailers that announced large numbers of new stores in 2023 include Foot Locker, which said at a March investor event it would open more than 300 off-mall stores by its fiscal 2026; Tractor Supply, which said in late July it would open 80 new stores in 2024 and another 90 in 2025 after opening 70 in 2023; and AutoZone, which said it would open about 200 stores in its current fiscal year, which ends in August 2024.
Store closing announcements were more widely distributed across retail last year and were led by Bed Bath & Beyond, which had 600-plus stores at the beginning of the year and has now closed all of them. Tuesday Morning was planning to close all 487 stores, and Walgreens said early in 2023 it would close about 150 of its 8,800-plus U.S. stores and another 300 of its 2,200-plus Boots UK stores.
Others announcing large numbers of closings last year included Foot Locker, which also said at its March investor event it would close more than 400 stores, and Rite Aid, which said it would close more than 150 of its more than 2,100 stores and could ultimately close up to 500 stores according to some reports. Signet Jewelers said in June it would close up to 150 underperforming stores over the next 12 months, mostly at lease expiration and mostly in traditional malls.
Methodology
Per The Daily on Retail’s methodology, openings and closings are specific numbers that have been announced, not completed, and could extend over several years. Also, The Daily on Retail’s tally excludes openings and closings that may have occurred in 2023 but were announced in 2022 or prior.
Patrick McKeever covered retail for more than 20 years as a Wall Street analyst before launching The Daily on Retail in 2019.
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