The persistent COVID-19 outbreak continues to decimate the retail landscape, which could see even more brick-and-mortar losses this year compared to last.
According to a new report from Coresight Research, retailers could collectively announce as many as 10,000 store closures in 2021 — a 14% increase from 2020’s already devastating levels. That would set a record high in the number of shutdowns as the pandemic leads retailers to rethink their physical footprints amid an accelerated shift to digital and plummeting in-store traffic.
Last summer, the advisory firm forecasted between 20,000 and 25,000 store closures for 2020, with 55% to 60% of those outposts located in malls and shopping centers. However, at the end of the year, the number of store closures culled by Coresight amounted to roughly 8,700. Comparatively, 2019 saw more than 9,800 shutdowns. (Coresight’s data covers department stores, mass merchandisers, warehouse clubs, discount stores and more, but it’s likely the total number of retail shutdowns last year exceeded the firm’s numbers as local shops and boutiques also closed in droves.)
Separately, Coresight reported that retailers — particularly grocery discounters and dollar store chains — could announce 4,000 store openings this year. Early in the health crisis, as government mandates forced thousands of businesses across the country to temporarily shutter their doors, essential retailers reaped the rewards of staying open, as consumers flocked to their stores to stock up on household supplies and other goods.
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Even as COVID-19 vaccines continue to roll out, many experts predict that it could take years for retailers to recover from the impact of the coronavirus on their brick-and-mortar businesses. An increasing number of shoppers, who might still be reluctant to return to stores, have instead adopted contactless services like buy online, pick-up in store and curbside pickup.
As of last week, Coresight shared that United States-based retailers have already announced 1,678 closures this year alone. Christopher & Banks and Macy’s are among the chains that have moved forward with shutting down some outposts: The former, which filed for Chapter 11 protection in mid-January, expects to shut down a “significant portion, if not all,” of its 449 units across 44 states. A Macy’s spokesperson, on the other hand, confirmed that 45 locations are heading for the chopping block; they were included in a list of previously announced closures as part of the company’s turnaround plan unveiled in February.
