10,000 stores set to close in 2021, Covid continues to hit retailers

A retail research and advisory group predicts there could be as many as 10,000 store closures announced by retailers in the United States this year, setting a new record, as the Covid pandemic continues to wreak havoc in the industry and as companies rethink how many places they can keep open.

10,000 closures would represent a 14% increase from 2020 levels, Coresight Research said in a report released Thursday. Coresight also predicts that retailers will announce 4,000 store openings in 2021, thanks to the growth of discount stores and dollar chain stores.

Last year, in the midst of the pandemic, Coresight predicted in June that there would be as many as 25,000 closings announced by retailers in 2020. But it ended up tracking just 8,741, as well as 3,304 openings. That was a deceleration from the 9,832 closures it tracked in 2019 – the highest number Coresight has seen as long as it tracked store closings and openings.

The reason for the large discrepancy between the final tally and its initial forecast, Coresight said, was because some companies “have resisted a recovery in store sales.” Many retailers have also been able to save time by cutting rents and making deals with their landlords so they can stay open a little longer, he said.

“In 2021, the deployment of [Covid] Vaccination programs are expected to result in a partial recovery in store sales, ”said Deborah Weinswig, CEO and founder of Coresight.

Some businesses won’t be able to wait much longer, Weinswig said, especially those that haven’t had the holiday season they were hoping for. Consumers will continue to spend more of their money online, which is another reason for the increased store closings expected this year, she said.

As of Jan. 22, Coresight said retailers in the United States have already announced 1,678 closures, including those of Bed Bath & Beyond, Macy’s and JC Penney.

Weinswig also pointed to a pattern that emerged in the retail industry after the Great Recession, which could repeat itself this year.

“Although the retail industry was significantly impacted in 2008 and 2009, the repercussions in terms of retailer bankruptcies peaked in 2010,” she said. “We could see history repeat itself in 2021, which will lead to more store closures this year than what we saw in 2020.”

Coresight said clothing retailers, including Ascena Retail Group and The Children’s Place, accounted for 36% of all store closings in 2020, totaling more than 3,000. The clothing category will likely account for a significant portion of closures this year as well. , did he declare.

A study published earlier this week by First Insight found that 40% of consumers planned to buy clothes in physical stores either the same amount or less after being vaccinated, implying that there will be no immediate rush to the mall.