- For the first time since 2016, major US retailers opened more stores than they closed in 2022, according to a recent report from Coresight Research. Retailers opened 5,103 stores last year and closed 2,603 locations, according to the report.
- Discount stores led openings, with 1,858 stores, while retailers in the apparel sector – clothing, footwear and accessories – closed 750 locations in 2022. That trend is likely to continue as the apparel sector “has led closures yearly since 2016,” the report said.
- The outlook for store openings and closings in 2023 is similar to last year, with discount stores expected to lead in openings and apparel stores likely to see the most closures. The report projects that 5,200 stores will open this year but 2,800 stores will close.
Inflation and economic uncertainty contributed to store count growth in retail’s discount sector.
Those trends “will likely continue to expand in 2023, given [the] current forecast of further economic slowdown, including a possible recession,” the report, which was authored by Coresight Research CEO and founder Deborah Weinswig, data analyst Aaron Mark Dsouza and analyst Daniel Rodden.
Store closures declined by just over 50% in 2022 compared to 2021. In contrast with 2019 and 2020, when numerous retailers filed for bankruptcy due to the pandemic, the number of retail-related bankruptcies declined in 2021. This trend helped bring closures closer to pre-pandemic levels.
“The retailers of the post-pandemic world are more robust, given their ability to survive lockdowns, supply chain problems and high inflation,” the report’s authors said. “As such, store closures in 2023 are unlikely to reach the numbers seen in 2019 and 2020, even if economic conditions worsen. Still, we expect the current economic environment to have some impact on store closures this year, likely resulting in a slight increase in store closures in 2023 compared to 2022.”
Four retailers led store openings in the sector last year. Dollar General opened about 1,024 stores and recently marked its 19,000th store opening. Family Dollar and Dollar Tree, which are owned by the same parent company, opened 393 and 206 stores, respectively. Youth-oriented retail discounter Five Below opened an estimated 134 stores in 2022.
Coresight said 10 retailers accounted for 73% of estimated apparel store closures in 2022:
- Foot Locker, with 187 stores
- American Eagle Outfitters, with 83 stores
- The Children’s Place, with 47 stores
- Gap and Genesco, with 39
- Olympia Sports, which closed all of its 35 stores and liquidated
- Burlington Stores and Chico’s with 27 stores
- H&M with 25 stores
The news wasn’t all down for the apparel sector though. TJX Cos., parent of TJ Maxx, and Burlington Stores opened an estimated 133 and 113 respective stores in 2022.
In other retail sectors, CVS Health closed an estimated 300 locations in 2022, leading closures in the drug store sector. Sears Hometown closed 204 stores, and also filed for bankruptcy late in 2022. Family Dollar closed about 100 stores and Amazon closed 57 locations in a move to focus on physical grocery stores.
CVS plans to close an additional 300 stores, Bed Bath & Beyond – which narrowly avoided bankruptcy – plans to close more than 150 stores, and American Eagle plans to close 83 locations.
Dollar General has aggressive opening plans in 2023 with more than 1,000 openings planned, according to Insider. Five Below plans to open 237 locations. Other retailers with announced openings in the double digits include Uniqlo, Dollar Tree, VF Corp. – parent of Vans, The North Face, Timberland and Dickies – and Academy Sports and Outdoors.
If the report’s projections come to fruition, the US will gain 82.6 million square feet of retail space but lose 41.7 million square feet through store closures. The estimates are based on historical data, consumer behavior outlooks, announced store openings and closings and data-based modeling.