There Should Be No Surprise When Retailers Shut Stores

Allow me to start by stating the obvious. 

No one likes it when a retailer closes stores. Those of us in the business have an understanding of the domino effect of these decisions. Jobs are lost. Stores sit vacant. And product suppliers have orders reduced. It’s never a good thing.

But, in all the years I’ve covered retail, there’s never been a store closure announcement that has come as a surprise. In some instances, I’ve had product suppliers whisper in my ear to keep an eye on certain retailers. The vendors see it first and the savviest ones take steps to protect their businesses when they see the warning signs.

The final weeks of 2024 and the start of 2025 have seen several high-profile retailers shrink store counts or shut their doors entirely. Big Lots, Party City, and Macy’s grabbed the headlines with announcements of store reductions or in the case of Party City, going out of business.

I’ve long been fascinated by the response of shoppers and the consumer media when retailers announce store closures or going out of business sales. With the three aforementioned retailers, was any of this really a surprise? Consumer media reports show shoppers expressing shock that a store is closing, but those reporters often fail to ask their interview subjects when was the last time they shopped the store. 

Big Lots has been on life support for some time. I was in a Big Lots store during a storewide percent-off promotion this past summer. The scary part was there were more store employees than customers. The shelves had products and there were good deals to be had, but the store lacked shoppers. I remember thinking this was a bad sign.

At Macy’s, the department store retailer has been struggling for years to maintain its relevance in the American retail landscape. Just before Christmas, I walked through a Macy’s store on Long Island and store traffic was OK. As a kid, this was the retailer I associated with Christmas. But nothing was captivating about the store and its holiday decor. And for the first time in years, I made a purchase at Macy’s. I spent $13 on a holiday decoration. Clearly I’m not doing my part to help.

We’re also seeing the drug chains reduce store counts. While the reasons for each vary, one of the ongoing conversations about retailers in the drug segment for years has been too many stores. Again, watching each cut store count is not surprising.

Also not surprising is the store count growth we’re seeking from the likes of Aldi, Sprouts Farmers Market, and Trader Joe’s. Each is a model of consistency, offering shoppers quality products at a good value, while also developing items that can’t be found at their competitors.

As with past years, I expect 2025 to offer some interesting and unique stories for us to discuss, especially when it comes to the continued growth of private label. But I won’t be surprised to see a couple of other retailers retool their businesses and close stores. The caution signs are there. You just have to pay attention.