Dollar and discount stores have made up more than half of the retail industry’s openings.
Retail stores had trouble remaining open in 2020, due to the combination of the growing online shopping trend and the COVID-19 pandemic. Things are starting to look better for stores this year however. According to Coresight Research’s weekly tracker, there have been more store openings than closures so far in 2021, Commercial Observer reports. Retail stores taking advantage of numerous vacancies and lower rents is a key reason for the early turnaround.
So far this year, more than 3,500 stores openings have been announced across the United States. There have been 3,169 closings. Both figures are more than what occurred during the first quarter of 2020, which was mostly pre-pandemic.
Discount stores see the biggest boost
It’s good news for the retail industry that there have been more store openings than closings so far this year. There are two things that should make storeowners only cautiously optimistic, however. First, there is currently not much difference between the number of retail store openings and closings—less than 400. The second issue is that more than half of the announced openings are not only from just four stores, it’s four stores in the same sector—discounts. Dollar General, Dollar Tree, Family Dollar and Five Below comprised a majority of the new store openings so far in 2021, Commercial Observer reports. Dollar General counted for more than 1,000 of those openings, and Dollar Tree made up another 393.
Discount chains were one of the few retailers that remained financially viable during the COVID-19 pandemic. Grocery and big-box stores also saw more foot traffic and sales while other retailers saw a decrease when it came to those metrics.
Other retailers are opening more slowly
Not every retailer is opening up locations as aggressively as the dollar and discount stores, however. Beauty product retailers like Sephora and Ulta Beauty plan to open a combined 100 stores, according to Commercial Observer. Meanwhile, athleisure stores such as Lululemon and Fabletics are looking open no more than 22 and 24 locations, respectively. Retail giant Amazon has just 12 physical locations planned.
On the other side of the coin are apparel retailer Francesca’s and convenience store Alimentation Couce-tard, which closed more than 300 stores apiece. Meanwhile, Family Video, a midwestern rental store announced earlier this year that is was closing all 250 of its locations. JCPenney saw Simon Property Group relieve it from bankruptcy, but will still close 18 stores in May and 23 during the year. Video game retailer GameStop plans to close 51 stores in 2021.
Retail store openings may not be outpacing closures by a wide margin, but it is still good news that more locations are opening than being shut down. Another good sign for retailers is that major bankruptcies are closer to pre-pandemic figures, per Coresight’s research, Commercial Observer reports. Papersource made the only filing in March and there have only been seven so far this year.
Joe Dyton can be reached at email@example.com.