Are expected to face a tough 2025
Retailers, among other businesses, are expected to face a tough 2025, with many planning closures. Analysts have predicted up to 45,000 closures in five years due to changing consumer habits and financial pressures. Denny’s CEO Kelli Valade said, “Everyone has lost traffic. Everyone.”
In this gallery, we take a closer look at the widespread struggle.
Advance Auto Parts
Advance Auto Parts will close 727 stores by mid-2025. Walgreens plans to shut 25% of its 8,700 U.S. locations over three years, starting with 500 closures in 2025. Advance Auto Parts CEO Shane O’Kelly said, “This action is prudent to support the long-term health of the company.”
Rethink their physical presence
In 2024, over 6,000 retail closures occurred. Trends like e-commerce and remote work push retailers to rethink their physical presence.
Survive in normal situations
Michael Brown, partner at global strategy and management consulting firm Kearney, said, “Companies were buoyed by Covid-related shopping patterns. It kept these players alive that couldn’t survive in normal situations.”
Large chains
Brown added, “All these large chains are putting pressure on smaller players. They lack the scale to get lower pricing. They lack the capital to be able to reinvest in the stores and the business to be able to be relevant.”
Any retail chain that is over-stored
Barbara Kahn, a marketing professor at the University of Pennsylvania’s Wharton School who studies retail, said, “Any retail chain that is over-stored, you’ll see a pulling back.”
Home improvement projects
Ted Decker, Home Depot’s CEO, said, “Higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects.”
Home improvement projects
Ted Decker, Home Depot’s CEO, said, “Higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects.”Visit in person
Kahn said, “It’s not that there’s an indictment of physical retail. It’s just a correction and a shifting to the type of retail people want to visit in person.”
Where consumers used to shop
Brown said, “Where consumers used to shop is not where they’re shopping now. There are new players coming into the market.”