In a distressing trend exacerbated by inflation, nearly 3,200 retail stores across the United States are set to close their doors in 2024, marking a significant increase in business failures and job losses.
This spike represents a 24% rise in closures compared to the previous year, illuminating the economic pressures that continue to disrupt the retail landscape.
According to a recent analysis by CoreSight Research, the closures span across numerous sectors, with drug stores and pharmacies being notably impacted, contributing to an alarming 8 million square feet of vacant retail space.
A major driver of these closures, apart from the inflationary pressures, is the rising trend of retail theft, particularly “organized retail crime,” which has led to considerable inventory losses.
Pointing to the severity of the situation, Family Dollar leads the pack with over 600 store closures.
Meanwhile, Tupperware, an iconic brand once synonymous with American kitchens, is shutting down its last manufacturing plant in Hemingway, South Carolina. This move will render 148 workers jobless, with layoffs beginning in September and continuing in phases through the following January.
The financial turmoil is not confined to smaller chains; prominent names like Rue21, the teen apparel retailer, have succumbed to bankruptcy.
Rue21 announced last month that it would close all 540 of its locations, citing underperforming stores and inflation as critical factors in its downfall. The company is grappling with a massive $200 million debt and will lay off all 4,900 employees.
Similarly, the 99 Cents Only Stores, a California-based discount retailer, filed for bankruptcy in April, blaming prolonged challenges in the retail environment for its decision to close all 371 of its stores. This string of closures also includes major players like CVS Health, 7-Eleven, Rite Aid, and Macy’s among others.
This trend isn’t just a reflection of corporate financial health but also significantly affects everyday Americans.
Inflation has not only impacted the retail sector but has also driven up costs in other areas of daily life, including car insurance and home buying.
Reports suggest that in 2024, potential homebuyers need 80% more income to purchase a home compared to 2020.
Furthermore, grocery bills have soared to levels not seen in three decades due to increased costs in transportation, fuel, ingredients, and labor.
Economists warn that while consumer spending has not yet declined, it is increasingly fueled by debt, leading to rising credit card and auto loan delinquencies.
David Rosenberg of Rosenberg Research highlights that the default cycle on consumer credit has already begun, signaling more economic turbulence ahead.
As these challenges mount, the issue of inflation remains a paramount concern among voters, transcending party lines.
A recent poll by The Center Square and Noble Predictive Insights reveals that inflation and the economy are the top concerns for Democrats, Republicans, and Independents alike, emphasizing the widespread impact of these economic woes on the national psyche.