Some of the most popular retailers in the United States are reducing their physical footprint right now as consumers batten down the hatches amid inflation and tighter credit conditions. Rising real estate costs, higher wages, and increasing expenses are leaving even the bestperforming chains afraid of what can happen to their balance sheets in 2024. For example, Sprouts Farmers Market has been one of the fastestgrowing retail chains in the U.S. in recent years, adding 30 locations to its store count in 2023. However, not all stores that opened in the past couple of years have succeeded in the U.S. market, and now the grocery retailer is getting rid of locations that are "underperforming financially," according to a press release. Executives said the closures would mostly impact largerformat Sprouts stores, as the chain transitions to "smaller, more productive" models. The company just revealed that stores on the chopping block were located in Texas, California, Georgia, Florida, and Washington, but did not provide specifics about how many stores will be impacted just yet.
Similarly, more Target stores are going out of business as the company faces its deepest crisis ever. In the first week of September, the Minnesotabased chain announced that it would close nine locations due to theft and inventory losses. By the end of October, that number jumped to 11. “In this case, we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target said in the press release. “We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.” The retail giant said that it doubled down on security to prevent this from happening, using thirdparty guard services and implementing theftdeterrent tools across its business, but also noted that the financial losses were simply too big to keep these locations open.
Brands are currently observing industrywide trends that suggest a tough period for businesses is ahead. That's why they are preparing accordingly by taking steps to eliminate underperforming locations and cut costs before sales drop even further. There's also a major shift towards online shopping that is rapidly changing the American retail landscape. While some brands are closing locations to weather the storm, others are already in their last legs and won't likely survive for another year. Since 2017, the sector has been experiencing a drastic shift in consumption patterns that has pushed brands to differentiate themselves from their competitors and constantly revaluate their businesses in order to remain profitable. The pandemic added even more stress to many companies, and the inflation crisis that followed has only made things worse as shoppers started to pull back and sales started to go down. Now, as another recession unfolds, the outlook for the sector is quite gloomy. Retailers have to act now, or risk being eviscerated by this downturn in 2024. As more shutdowns are reported each week, your local retailer may stop serving your community before you even notice. For that reason, we compiled the latest store closing announcements in the retail industry.