As The Pandemic Continues, More Than 10,000 Stores Are Set To Close in 2021

According to researchers, as many as 10,000 retail stores will be closing in the United States due to the pandemic, which sets a new record; now, as the pandemic continues to take a toll on the retail industry, companies have to decide which store locations to keep open.

Coresight Research said in a study released Thursday that 10,000 closures would mark a 14% uptick from 2020 levels. In  2021, Coresight expects 4,000 store openings, driven by a rise in grocery discounters and dollar store chains.

In June of last year, Coresight estimated that there would be as many as 25,000 retail closures in 2020. Instead, they reported 8,741 closures and 3,304 retail openings, which was a decrease from the 9,832 closures reported in 2019, and the highest number of retail closings and openings Coresight has seen.

Coresight said that the cause for the massive gap between the final count and its original estimate was that some businesses were “holding out for an upturn in store-based sales.” Several retailers have been trying to buy more time by lowering rent and negotiating deals with their landlords to remain open a little longer.

“In 2021, the rollout of Covid vaccination programs should result in a partial recovery in store-based sales,” Coresight CEO and Founder Deborah Weinswig said. “However, these programs may take many months to reach a wide base of consumers.”

Weinswig said most companies won’t be able to wait, especially the retailers who didn’t have their usual holiday season to look forward to. Another reason for the increase in store closures is that consumers continue to spend money online.

Coresight said that Bed Bath & Beyond, Macy’s, and J.C. Penney are among the 1,678 retail closures in the US as of Jan. 22. Weinswig also pointed to a retail industry pattern after the Great Recession, which could repeat itself this year.

“Although retail was significantly impacted in 2008 and 2009, the repercussions in terms of retail bankruptcies peaked in 2010,” she said. “We could see history repeat itself in 2021, resulting in greater numbers of store closures this year than we saw in 2020.”

In 2020, Coresight said apparel retailers, including Ascena Retail Group and The Children’s Location, accounted for 36% of all shop closures–more than 3,000. This year, too, the fashion group would probably make up a large portion of closures, it said.

Research released earlier this week by First Insight found that 40% of customers expect to shop for clothing in brick-and-mortar stores after being vaccinated, either the same amount or less, suggesting that there will be no immediate rush back to the mall.