March 27, 2025 | New York, NY
Across the United States, retail stores are shutting their doors at an alarming rate, marking a shift in the traditional retail landscape. From well-established department stores to local boutiques, businesses are struggling to adapt to a combination of economic pressures, changing consumer habits, and increasing competition from e-commerce giants. This trend of store closures, which began several years ago, has accelerated in 2025, with more companies announcing the closure of both individual locations and entire chains.
The Impact of E-Commerce and Changing Consumer Behavior
The rise of online shopping has been one of the main driving forces behind the closures. According to a report from the U.S. Census Bureau, e-commerce sales accounted for 18% of total retail sales in 2024, up from just 4% in 2010. Consumers increasingly prefer the convenience of shopping online, with the ability to compare prices, read reviews, and have products delivered directly to their doorsteps. As a result, many brick-and-mortar stores are seeing a sharp decline in foot traffic.
“In the past few years, we’ve seen a drastic shift in how people shop. Consumers are more comfortable with buying things from their phones and laptops,” said Olivia Walker, a retail analyst at The Retail Institute. “With stores like Amazon, Target, and Walmart leading the charge in online sales, it’s been difficult for traditional stores to compete.”
In response, many retailers are opting to close physical locations and shift their focus to enhancing their online presence. Well-known brands like Bed Bath & Beyond, J.C. Penney, and Macy’s have been scaling down their in-store operations, opting for smaller stores or investing in their e-commerce platforms.
Mass Closures by Major Retailers
Several major U.S. retailers have made headlines in recent weeks for announcing the closure of hundreds of locations across the country. On March 12, 2025, Macy’s confirmed it would close 35 stores over the next year as part of a restructuring effort. While the company noted that its online sales were growing, the store closures are a sign of its struggle to balance in-store shopping with the increasing shift toward digital retail.
Similarly, Bed Bath & Beyond, which has struggled in recent years due to mounting debt and a drop in foot traffic, recently revealed plans to shut down 250 of its stores. The closures come as part of a company-wide effort to streamline operations and focus on its most profitable locations.
Meanwhile, Best Buy has also joined the list of retailers scaling back its physical footprint. The electronics giant, which had once prided itself on its brick-and-mortar stores, is closing 15% of its locations nationwide by the end of 2025. With consumers opting to buy electronics online and increasingly using delivery services like Amazon Prime, Best Buy is attempting to adapt by offering more in-store pickup and home delivery options.
The Toll on Local Communities
The surge in store closures is not just affecting big-box retailers; it is also leaving a significant mark on local communities. Small businesses and mom-and-pop stores that once served as anchors in shopping districts are increasingly closing their doors as they are unable to compete with the low prices and convenience offered by online retailers.
In cities like Detroit, Michigan, and Louisville, Kentucky, long-established shopping centers are seeing a dramatic reduction in foot traffic, which has led to vacant storefronts. In some areas, entire malls are being abandoned as tenants leave in search of more cost-effective ways to do business.
“When a store closes, it’s not just about losing a place to shop. It’s a blow to the community,” said Janet Perez, a longtime resident of Louisville. “We lose jobs, we lose opportunities for small businesses, and we lose a piece of what makes a neighborhood feel alive.”
The closure of shopping malls has been one of the most noticeable shifts in retail. Once bustling hubs of activity, many malls are now seeing more empty spaces than tenants. According to the International Council of Shopping Centers (ICSC), about 25% of U.S. malls are expected to close or be repurposed by the end of the decade. As vacant malls multiply, some owners are beginning to explore creative solutions, such as converting former retail spaces into residential apartments or healthcare facilities.
Economic Pressures and Rising Costs
Store closures have also been exacerbated by rising operational costs. Many retailers are grappling with inflation, increased labor costs, and supply chain disruptions that have significantly impacted their bottom lines. These financial strains, coupled with the shift in consumer shopping habits, have forced many businesses to rethink their strategies.
The minimum wage increase in many states has been another contributing factor, with higher wages leading to increased labor expenses for retailers. For smaller stores with already slim profit margins, these rising costs are difficult to absorb, leading to a growing number of closures.
“Smaller stores simply can’t afford to stay open in today’s retail climate,” explained Mark Johnson, CEO of a consulting firm specializing in retail operations. “From higher wages to inventory shortages, it’s a perfect storm for many businesses. And the rise of online shopping has only made things worse.”
The Rise of Omnichannel Retailing
As physical stores close, many businesses are investing in omnichannel retailing, which combines the convenience of online shopping with the personalized experience of in-store visits. This trend is reshaping the future of retail, as companies look to provide customers with multiple ways to interact with their brands.
For example, Nordstrom and Target have expanded their curbside pickup services, allowing customers to order items online and pick them up at a local store. This service, which surged in popularity during the COVID-19 pandemic, has since become a key component of many retailers’ strategies for staying competitive.
“We’re seeing retailers adapt to changing consumer needs by offering a blend of in-store experiences and digital convenience,” said Walker. “The future of retail isn’t about completely abandoning physical stores, but rather about finding ways to integrate both online and offline shopping into a cohesive experience.”
The Future of Retail
While the number of store closures continues to rise, the future of the retail industry is still uncertain. Many experts believe that the next decade will see an even greater shift toward digital-first strategies, as well as a reimagining of what physical stores should look like.
For example, stores like Apple and Amazon have pioneered new retail models, focusing on customer experiences rather than just product displays. In these new models, stores serve as showrooms or service centers, with the emphasis on providing an experience rather than inventory-heavy spaces.
Despite the closures, the retail sector is far from disappearing. In fact, new retail concepts—such as direct-to-consumer brands, pop-up shops, and experiential stores—are starting to emerge and fill the gaps left by traditional retailers. For example, Warby Parker and Glossier, which initially began as online-only brands, have opened brick-and-mortar stores to cater to customers seeking a more personalized shopping experience.
