The retail sector is bracing for a challenging year, with projections indicating that over 15,000 chain stores across the United States will close in 2025, more than double the number from the previous year. This surge in closures is primarily attributed to mounting economic pressures and the rapid expansion of online retailers such as Temu and Shein.
As of mid-January, 2,041 stores have already closed or announced impending closures. Major retailers like Big Lots and Dollar Tree are leading this trend, with Big Lots filing for Chapter 11 bankruptcy and planning to close over 700 stores, retaining approximately 200 locations. Dollar Tree has announced the shutdown of 1,000 stores, including 370 Family Dollar and 30 Dollar Tree outlets, following a significant $1.7 billion loss in the fourth quarter of 2024.
Macy’s has also been affected, with CEO Tony Spring issuing a warning about economic uncertainties amid inflation and a challenging political environment. The company has closed 150 struggling locations as part of its “Bold New Chapter” strategy and projects a decline in sales for fiscal 2025, estimating between $21 billion to $21.4 billion, down from $22.3 billion the previous year.
The rise of e-commerce platforms, particularly China-based Temu and Singapore-based Shein, has intensified competition. These online retailers have rapidly expanded their user bases in the U.S., offering consumers better prices and a more convenient shopping experience. Consequently, online shopping is expected to account for 23.1% of retail sales in 2025.
In addition to store closures, several major companies across various sectors have announced significant layoffs. For instance, Adidas plans to cut up to 500 jobs at its headquarters in Germany, while Hewlett Packard Enterprise is reducing its workforce by 2,500 positions.
The retail industry is also grappling with the aftermath of the COVID-19 pandemic, which accelerated the shift towards online shopping and left many brick-and-mortar stores struggling to adapt. This ongoing transformation underscores the need for retailers to innovate and align their strategies with evolving consumer preferences to remain competitive in a rapidly changing market landscape.