The Retail Apocalypse: Why Many Stores Are Closing in the US

Have you noticed what's going on with stores lately? It's crazy out there. Everywhere you look, another store is shutting down. And it's not just in my neighborhood—this is happening all over. The Miami Times is calling it a retail apocalypse.

The Retail Apocalypse in the US 2024

Get this: 3,200 stores have already closed this year, and we're just about halfway through. They’re saying even more will go under by New Year's. Walgreens just announced significant store closures. They have 8,600 stores nationwide. Other big names like Macy's are shutting down 51 stores, Rite Aid is closing 165 locations, 7-Eleven is closing 272 stores, and Family Dollar is closing a whopping 620 stores. It feels like no one's safe. Clothing stores, drug stores, dollar stores—I even heard Hooters is closing a bunch of locations.

I don't know about you, but this feels like more than just a few businesses having a bad year. Something big is going on, and I think we need to be paying attention. What do you think? Have you noticed this in your area? Today, we're diving into this retail apocalypse that's unfolding right now and what it means for our economy and for you.

What is a US Retail Apocalypse?

Hey there! Welcome or welcome back to my blog. I'm Noel Lorenzana. I've been advising business owners as long as I've been an accountant, and that's been a long time. So, what exactly is a retail apocalypse? It's a term used to describe the massive closure of brick-and-mortar retail stores. This trend has been increasing over the past few years, but now we're seeing an unprecedented wave of store closures.

Why are so Many Big Name Stores Closing in the US?

A big reason for these closures is the rise of online shopping. Retailers just can't compete with the convenience and often lower prices that online shopping offers. Then there's inflation. As prices keep climbing, people are cutting back on their spending, and that's hitting retailers hard. And let's not forget bankruptcies. Many stores were already struggling, and then the pandemic happened. Many businesses got free government money, which likely has all run out.

List of Retailers in the U.S Affected by the Retail Apocalypse

Alright, let's talk about who's getting hit. The teen clothing store Rue 21—they're shutting down all 543 of their stores. Even the big-name stores are feeling the heat. Best Buy is closing 9 stores. Now, that might not sound like a lot, but come on, it's Best Buy we're talking about. And it doesn't stop there. Corsight, a company that keeps track of this data, has some more interesting numbers. CVS Health is saying goodbye to 315 stores. Walgreens isn't far behind, shutting down 77 stores, according to this Miami online article. Just last week, they announced additional store closures. They didn't say how many, but they said it's going to be significant. And Macy's, as I mentioned earlier, is closing 51 stores.

What do you think this means for our local malls and shopping centers? Many malls have already closed their doors. Are we heading towards a future with no physical stores? Let me know your thoughts in the comment section. I'm really curious to hear what you're seeing in your local area.

What does the Retail Apocalypse mean for the American Economy?

Let's talk about the broader impact. The ripple effect of these closures extends far beyond the stores themselves. It affects suppliers, the real estate industry, and of course, local economies. When a major store like Macy's or Best Buy shuts down, it's not just the employees of that store who are affected. Suppliers lose a key customer, malls lose a major anchor tenant, and local economies lose a source of jobs and tax revenue.

For many of us, this means fewer shopping options, job losses, and a shift in how we spend and save money. It's a domino effect that could have serious consequences for our economy. Consumer spending is still okay, but confidence is declining. In May, the University of Michigan's survey of consumer sentiment showed a drop in consumer confidence from 77.2 in April to 69.1. This uncertainty, along with the end of federal pandemic stimulus money, means people are probably going to cut back on their discretionary spending.

The Possibility of a Recession

Next up, let's talk about the possibility of a recession. So, stores are shutting down left and right. It's not just your local mom-and-pop shops anymore. We're talking about the big-name stores like Walgreens, Macy's, and Rite Aid. They're closing stores all over the place. And let me tell you, it's not just a retail problem. It's potentially a big red flag for our economy.

Think about it. Why are all these stores closing? It's because people aren't spending like they used to. Things have gotten so expensive, and they're losing confidence in the economy. When people stop spending, businesses start hurting. It's a vicious cycle. Now, I'm not trying to be all doom and gloom here, but we've seen this before. These are the signs that pop up before a recession hits. As these stores close, people lose jobs, then they spend even less, and before you know it, the whole economy starts to slow down.

I'm telling you, this retail meltdown is a serious warning sign. It's like a canary in a coal mine. We need to wake up and recognize that a recession is probably right around the corner. Some people say that the powers that be are propping up the economy and economic data because it's an election year. If that's the case, then after November, you better hang on to your hats. It might be time to start preparing now. Agree? Disagree?

Do check out my video here, where I talk about the possibility that we're headed for another Great Depression. Thanks for reading, and see you in another post!