US retail closures According to the latest estimates, it has reached the highest level since the Covid-19 outbreak.

According to the latest data from Coresight Research, retailers announced 6,481 store closures as of Nov. 8, up 336 from last week. The majority of these closures were caused by: American TransportationIt is closing all 329 of its locations as part of its parent company’s bankruptcy proceedings.

Coresight also recorded 5,363 store openings this year as of Nov. 8, including 30 openings last week. But John Mercer, head of global research at Coresight, told FOX Business that closings are still outpacing openings, which is different from the trend of the last two years.

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In 2021, closings exceeded openings by only 180 stores, and in 2020 the difference was much larger; closings outpaced openings by nearly 6,000 stores.

According to the latest data from Coresight Research, retailers announced 6,481 store closures as of Nov. 8, up 336 from last week. (Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images)

Additionally, Coresight has tracked 43 retail bankruptcies this year; This is a sharp increase from the 25 bankruptcies recorded in 2023.

Mercer noted that there are a number of macroeconomic factors holding retailers back. During inflation has fallenMercer said consumers look at prices rather than the inflation rate, causing them to be cautious about spending.

At the same time, high interest rates also hindered operations to some extent. If a retailer has any debt, the cost of that debt will increase because interest rates are considered significantly higher than they were a few years ago, Mercer said.

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“You see these pressures on both sides, and then there are other costs,” Mercer said.

For example, retailers face higher labor costs. Another challenge is continued weakness. housing marketIt causes fewer people to move. He said the lack of movement in the market was affecting high-priced items such as furniture, home improvement, appliances and some electronic products.

A store closing sale sign in front of Pottery World in Orlando. (Jeffrey Greenberg/Universal Images Group via Getty Images)

Macroeconomic pressures disproportionately affect low-income consumers, as are companies most affected.

Mercer said prime examples of this are American Freight and Big Lots, which closed stores as part of Chapter 11 bankruptcy proceedings. Both companies are heavily exposed to low-income consumers and the struggling housing market, he said.

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Large lots applied Chapter 11 Bankruptcy It will seek protection in September to help facilitate the sale of “substantially all” of its assets to “stalking horse bidder” Nexus Capital Management. It also announced plans to permanently close dozens of stores.

“There are cases where these negative factors actually overlap, and in some cases it compounds issues that retailers already have,” Mercer said.

In some cases, companies may not be in trouble but may need to make adjustments.

“I think some pharmacy closings fall into that category,” he said.