Just a fortnight into the new year, the American retail sector is already facing a fresh wave of turmoil, with prominent chains announcing significant store closures. Industry analysts have told the Daily Mail that the situation is set to worsen throughout 2026.
A Wave of Closures Hits Major Names
The ongoing retail crisis escalated last week when Macy's confirmed plans to shutter 14 'underproductive' stores across 12 states. This was swiftly followed on Tuesday by the luxury department store group Saks Global filing for bankruptcy, marking one of the largest retail failures since the pandemic.
This bleak start follows a devastating 2025, which saw more than 8,000 chain store locations permanently close across multiple companies. Data from Coresight Research shared with the Daily Mail reveals that 8,234 US stores shut last year, a 12% increase on 2024's 7,325 closures and the highest number ever recorded.
Experts Point to an 'Over-Retailed' America
Retail leaders are clear on a fundamental cause. "America has been over-retailed," stated Ward Kampf, president of Northwood Retail. "We built and built, focusing on growth, expansion, and development, and now the focus is on profitability, performance, and margins."
Neil Saunders, another retail expert, agrees, noting the trend shows no sign of abating. "Against the backdrop of rising costs, a lot of retailers are looking to become more efficient," Saunders explained. "Part of this involves closing underperforming stores that are not producing sales growth or contributing to profits."
Kampf describes the US market as being at an 'inflection point' within a 'K-shape economy', where brands compete for a narrow pool of discretionary spending. Saunders added that overwhelming consumer choice and a growth slowdown in every competitive sector are forcing this market correction.
Winners, Losers, and the Shift to Online
While many struggle, some retailers are bucking the trend. Walmart continues to grow, attributed to its focus on essential items, low prices, and a formidable omnichannel strategy. Its online revenue surged 27%, and its stock grew 25% year-to-date.
In stark contrast, Target, which also sells essentials, saw its stock shrink by 30%. Kampf suggested Target needs "soul searching" to recapture customers, citing failed innovations and a cultural misalignment with some shoppers.
The shift to digital is undeniable. E-commerce generated $310.3 billion in Q3 2025, accounting for over 15% of total sales. However, physical stores are not dead. An Adyen report found 45% of shoppers still prefer in-person experiences, and Saunders stressed that "the vast majority of sales are still made in-store." Kampf concluded that "an omnichannel approach is vital."
Last year's closures were led by bankrupt giants like Rite Aid, Joann Fabrics and Crafts (815 stores), and Party City (738 stores). Notably, 30 companies filed for bankruptcy in 2025, down from 51 in 2024, suggesting the market is clearing out weaker operators. Amid the closures, retailers still opened 5,252 new stores, led by discount chains like Dollar General (611 openings) and Dollar Tree (442).
