Full Breakdown
Retail Closures Surge Amid Changing Consumer Preferences
1/18/2026, 9:43:35 PM
Overview of the Retail Landscape
As of early 2026, the retail sector in the United States is experiencing significant upheaval, marked by a wave of store closures among major retailers. Notably, Macy's announced the closure of 14 underperforming stores across 12 states, while Saks Global filed for bankruptcy, representing one of the largest retail failures since the onset of the COVID-19 pandemic. In 2025 alone, over 8,000 retail locations permanently shut down, a 12% increase from the previous year, according to Coresight Research.
Factors Driving Store Closures
Experts attribute the ongoing retail crisis to several interrelated factors. Ward Kampf, president of Northwood Retail, stated, "America has been over-retailed," emphasizing a shift from expansion to a focus on profitability and performance. Neil Saunders, another retail analyst, noted that rising operational costs are prompting retailers to close stores that fail to generate sales growth. This trend is compounded by an increasingly competitive market, where consumers have a plethora of choices across various sectors.
Starbucks, for instance, closed over 400 stores in 2025 as part of a restructuring initiative aimed at improving customer experience. Conversely, Walmart has continued to thrive by selling essential items and maintaining low prices, which has attracted a broader consumer base. Walmart's stock increased by 25% year-to-date, while Target's stock fell by 30%, reflecting differing consumer perceptions and shopping habits.
Shifts in Consumer Behavior
The retail landscape is also being reshaped by changing consumer preferences. E-commerce sales reached $310.3 billion in the third quarter of 2025, marking a 5.1% increase from the same period in 2024. Despite this growth, approximately 45% of shoppers still prefer in-person shopping, with Baby Boomers showing the highest preference for physical stores. Neil Saunders remarked that "the vast majority of sales are still made in-store," indicating that while online shopping is on the rise, physical retail remains crucial for profitability.
Bankruptcy and Market Consolidation
The retail sector has seen a notable number of bankruptcies, with 30 companies filing for bankruptcy in 2025, down from 51 in 2024. This trend suggests that stronger retailers are surviving while weaker chains are being eliminated from the market. Notable closures include Party City, Joann Fabrics, and Rite Aid, which all shuttered locations after financial struggles.
New Openings Amid Closures
Despite the wave of closures, the retail sector is not entirely contracting. In 2025, retailers opened 5,252 new stores across the country. Dollar General led the way with 611 new locations, followed by Dollar Tree and Circle K. This indicates a complex retail environment where some companies are adapting and expanding even as others downsize.
Official Statements & Responses
Retail experts emphasize the necessity for companies to adapt to the evolving market. Kampf noted that "physical stores remain critical for profitability," while Saunders highlighted that many closures are driven by internal business issues rather than solely by the rise of e-commerce.
Conflicting Reports & Gaps
While the overall trend indicates a significant number of closures, there are discrepancies regarding the impact of e-commerce on physical retail. Some analysts argue that the closures are primarily due to operational inefficiencies rather than a direct result of online shopping trends.
Verbatim Quotes
- “Ward Kampf, president of Northwood Retail, told Daily Mail: 'America has been over-retailed.” — Ward Kampf, President of Northwood Retail
- “'Against the backdrop of rising costs, a lot of retailers are looking to become more efficient,' Saunders told Daily Mail.” — Neil Saunders, Retail Expert
- “Saunders believes in-store shopping will still be a thing in the future, as 'the vast majority of sales are still made in-store.” — Neil Saunders, Retail Expert
- “Kampf agreed, he said: 'Physical stores remain critical for profitability, and an omnichannel approach is vital.” — Ward Kampf, President of Northwood Retail
