The American retail landscape faced a severe contraction in 2025, with more than 8,200 stores shutting their doors. This figure marks one of the highest annual totals ever recorded in the United States, driven by a punishing combination of rising import tariffs, unsustainable debt levels, and fundamental changes in how consumers shop.
A Perfect Storm of Economic Pressures
The number of store closures jumped by 12 percent compared to 2024, when 7,325 stores closed, according to data from retail research firm Coresight Research. While lower than the peak of nearly 10,000 closures in 2020, the upward trend is clear and concerning. Industry analysts from TheStreet.com noted that the downward trajectory seen in 2024 proved difficult to halt, with challenges expected to persist into 2026.
Public records and company announcements revealed that at least 30 major U.S. retail chains sought bankruptcy protection in 2025. The pain was widespread, affecting pharmacies, department stores, coffee shops, discount chains, and restaurants alike.
Tariffs and Trade Turmoil Take a Toll
Many retailers pointed directly to increased tariffs on imported goods as a primary cause for their struggles. Outdoor specialist Orvis announced plans to close 36 stores by early 2026, with its president, Simon Perkins, citing an "unprecedented tariff landscape." Similarly, children's apparel giant Carter's unveiled a strategy to shut down 150 stores over three years, blaming "elevated product costs" partly due to higher tariffs.
The home decor chain At Home filed for Chapter 11 bankruptcy in June 2025 and closed around 30 locations. Its CEO pointed to a rapidly evolving and challenging trade environment. The financial impact on households was significant; the Tax Foundation estimated that tariffs cost the average American family an extra $1,200 in 2025.
Crushing Debt and Bankruptcy Waves
Heavy debt burdens, frequently resulting from leveraged buyouts by private equity firms, emerged as another critical factor. Craft retailer Joann closed approximately 800 stores following its second bankruptcy filing in a year, struggling under a debt load exceeding $1.1 billion.
In a major blow to the pharmacy sector, Rite Aid ceased operations in October 2025, closing nearly 1,300 stores. Discount retailers were not spared. Big Lots filed for bankruptcy and shuttered over 300 stores as budget-conscious shoppers tightened their belts. The 99 Cents Only chain liquidated all 371 of its stores, resulting in 10,800 job losses, and Bargain Hunt closed all 92 locations after a February 2025 bankruptcy filing.
By November 2025, S&P Global Market Intelligence reported that 717 U.S. companies had filed for bankruptcy—the highest number in 15 years.
Sector-Wide Retreat and Lasting Consequences
The fallout extended across every retail category. Dollar General closed 141 stores, citing difficulties in urban operations. Department store icon Macy's plans to close 150 locations by the end of 2026 as part of a new strategy. Even discount luxury was hit, with Saks Off 5th announcing 10 store closures starting January 2026.
Pharmacy chains Walgreens and CVS continued aggressive closure plans, reducing healthcare access for many communities. Walgreens is closing 1,200 stores over three years, with about 500 gone in fiscal 2025. CVS closed more than 270 locations in 2025 alone.
Changing work patterns impacted food and beverage chains. Starbucks closed roughly 400 stores as part of a billion-dollar restructuring, including 42 in New York City where it lost its top spot to Dunkin'. 7-Eleven shut over 500 stores since 2024, and Wendy's plans to close 200-350 restaurants through 2026.
Looking forward, Forbes has warned that the vulnerability of specialty retail could reach a breaking point in 2026. High interest rates, the relentless shift to online shopping, and fierce competition from mass merchants are predicted to push overleveraged companies into insolvency, with heavily indebted retailers facing the greatest risk.
