Dive Brief:
- By the fourth week of January, announced store closures across the retail industry — at 742 total — were down 65% compared to the same time last year, according to the latest counts by Coresight Research. CVS accounts for 300 of those closures.
- Store openings, meanwhile, stood at 1,910, a 3% increase from last year. Coresight’s tallies for the full year 2021 showed that openings (5,048) outpaced closures (4,975) in a year marked by strong consumer demand and few retail bankruptcies.
- So far this year, Dollar General has more planned store openings (1,102) than every other retailer combined, according to Coresight data.
Dive Insight:
Coresight’s early store counts show a 2022 that so far is unfolding much like the year that passed, which showed a marked inversion of the trends from years past.
Store closures weighed on the industry’s collective mind in the latter half of the 2010s. Those years saw retailers downsizing footprints both piecemeal and dramatically, with large waves of closures that occurred both in and out of bankruptcy.
Sprawling chains such as Payless and Toys R Us liquidated entirely in bankruptcy as they failed to marshal a plan forward in an era of fierce competition, technological shifts and changing consumer behavior. (The debt loads from the private equity buyouts of those and many other retail names did not help either.)
Bankruptcies in the industry slowed dramatically last year, thanks to strong consumer spending and government support of the financial industry, which helped funnel capital and boost liquidity for players that needed some.
But a tapering in closures is only half the story. The thousands of openings last year and on deck for this year show the resilience of brick-and-mortar retail, especially in discount sectors, which have accounted for an outsized share of openings in recent years.
One discounter in particular has been on a building spree. Dollar General accounted for roughly one-fifth of store openings in 2021, with 1,039 announced new stores, according to Coresight. And this year the deep discounter is off to the races again, with more than 1,000 announced openings planned so far in 2022.
Executives with the retailer said last year they see an opportunity to add up to 17,000 stores to its base, a number made more astonishing given the company’s current footprint of nearly 18,000 stores.
Among others with the largest opening plans this year are, according to Coresight, Burlington Stores, Signet Jewelers, Windsor Fashions, Aerie, Big Lots and Citi Trends.
Retail remains a competitive, challenging, ever-changing business. The current drop-off in both store closures and bankruptcies, which go hand in hand, isn’t necessarily fated to last forever.
