Another No Good, Very Bad Year for Retail Stores
As of early December, US retail store closures were up 13.2% from the same period in 2024, according to a report from Coresight Research.
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There was no forever in store for Forever 21’s US stores. The same goes for fellow bankrupt companies Joann Fabrics and Party City, which joined the fast-fashion brand in closing their brick-and-mortars over the past year.
We experienced another slaughter for physical stores at large in 2025 as inflation and high operational costs ate away at profit margins and shoppers continued to purchase from their couches. Tween favorite Claire’s, department stores Kohl’s and Macy’s, and discount retailer Big Lots were also victims.
As of early December, US retailers had announced more than 8,000 store closures for the year — up 13.2% from the same period in 2024, according to a report from Coresight Research. Those closures come alongside just about 5,100 store openings, which is 8% fewer than last year.
End of the Mall Rat?
Next year looks a bit brighter on the macroeconomic front, thanks to projections of lower inflation, lower interest rates, lower unemployment and stronger GDP growth. But continued fragmentation in consumer behaviors may boost nontraditional players, says John Mercer, head of global research for Coresight. Think cross-border commerce like Temu and Shein, social commerce via Instagram and TikTok, and quick commerce platforms with lightning-fast delivery.
In other words, 2026 looks like another rough year for retailers trying to get customers to the mall:
- Mercer says we can expect store closings to remain high and even increase if retailers face rising costs that they can’t pass on without driving customers away.
- We’re also about to see more AI-powered shopping agents. McKinsey predicts that by 2030, the US business-to-consumer retail market could see up to $1 trillion in revenue from agentic commerce.
The Dollar Generals, Marshalls and Aldis of the world have less to fear. Successful value-positioned off-pricers, dollar stores and discount grocers will continue expanding, Mercer predicts.
Gen Z Shows Promise: Teens and 20-somethings are known for being glued to their screens, but they may actually be the market that brick-and-mortars need. A PwC analysis shows that 61% of Gen Zers want to discover new products in stores. This holiday season, those young shoppers wanted to be able to touch and see products before swiping their cards, enjoy festive displays and chase in-store promotions.
