Chains such as Walmart, Nordstrom and Walgreens are closing their doors in major cities because of crime, working from home, online shopping and rising rents, experts warn.
A study of the JP Morgan Chase Institute between 2017 and 2021, San Francisco, LA, San Diego, New York, Seattle, Miami, and Chicago all lost major stores.
By the end of 2023, Walmart will have closed 60 stores since 2021. This year alone, Nordstrom will close 15 stores, and CVS will have closed 900 by the end of 2024.
By the end of 2023, Walmart will have closed 60 stores since 2021
Last month, Bed, Bath & Beyond was declared bankrupt, with many citing Amazon’s rise for its failure
Walgreens has struggled in recent years with many buying their vitamins online
As for working from home, a Stanford University study found that the average office worker will spend as much as $4,600 a year in city centers.
While online shopping accounted for almost 15 percent of retail sales in the last quarter of 2022.
The most frequently bought products were clothing, including shoes, but also vitamins and electronics.
So told an expert, Terry Shook, one of the founders of Shook Kelly consultancy CNN that when the big stores disappear, retail “will come back in different ways and in different forms.”
Last month, former retail giant Bed Bath & Beyond announced its bankruptcy.
The statement came after months of bad financial news culminating in the closure of 236 stores in February.
Since then, Bed Bath & Beyond has struggled to maintain its 360 brand stores and 120 Buybuy Baby stores, despite mounting debt of nearly $5.2 billion.
Its demise was attributed in part to the success of Amazon and other online giants cementing their place in the marketplace.
Investment bank UBS warned earlier this year that 50,000 stores would close by 2027, warning that “the pace of store closures will accelerate due to the combination of a slowdown in consumer spending, a reduction in credit availability and an increase in penetration rates.” of e-commerce.’
Earlier this month, Nordstrom announced its decision to leave the San Francisco area due to rampant thefts.
The retailer told staff it would not be renewing its leases at the Westfield Mall or at the Nordstrom Rack across the street.
The mall location will close at the end of August and the Rack store will remain open until July 1, according to the Washington Post.
Jamie Nordstrom, Nordstrom’s chief stores officer, has blamed the state of San Francisco for reducing foot traffic “and our ability to operate successfully” in recent years.
Westfield Mall said in a statement to the Washington Post that the move was prompted by the “worsening situation in downtown San Francisco” that has left customers and staff unsafe.
The rampant crime in downtown San Francisco has led countless shopkeepers to throw up their hands and leave.
In April, Whole Foods announced it was closing its locations, while Anthropologie and Office Depot also left. Remaining stores like Target have been reduced to locking their entire inventory behind glass to deter shoplifters.
“These kinds of decisions are never easy, and this one was particularly difficult,” Nordstrom wrote in his email.
“However, as many of you know, the dynamics of the downtown San Francisco market have changed dramatically in recent years, impacting customer foot traffic to our stores and our ability to operate successfully.”
Walmart announced in April that it would close half of its Chicago stores, which are mainly located on the south and west sides of the crime-ridden city, which are losing millions each year.
The four stores closing their doors have been “unprofitable” for years, even after efforts to turn them around, according to a statement on their website.
“The simplest explanation is that our stores in Chicago have collectively not been profitable since we opened the first one nearly 17 years ago,” Walmart said.
“These stores are losing tens of millions of dollars a year and their annual losses have nearly doubled in the past five years,” the statement continued.
At least 11 other stores have closed so far this year across the country, from Hawaii to Washington, DC
Things don’t look any better in the world of fast food.
Just this week, Burger King confirmed it would close a record number of stores in 2023.
In an effort to keep up with its fast food rivals, CEO Joshua Kobza announced that the chain will close between 300 and 400 underperforming restaurants by 2023.
Burger King axed 124 locations in the year to March, according to its earnings release, leaving 6,964 spots nationwide.
A bankrupt franchisee has already announced it will close 27 locations in seven states this year.
Burger King is now the third largest fast food restaurant in the US, having lost its second place to Wendy’s. McDonald’s remains top dog. Burger King is also under pressure from higher end chains, including Five Guys and Shake Shack.
Also this week, a Hardees franchisee filed for bankruptcy after 39 of its 108 restaurants across America had to close.
Summit, which is owned by fast food franchise Carls Jr. parent company CKE Restaurants, is now looking for a buyer to try to keep the remaining 108 restaurants afloat.
Affected locations are across America, with Summit’s Hardees stores in Alabama, Florida, Georgia, South Carolina, Kansas, Missouri, Wyoming and Montana.