More chain stores closed in 2023 as a result of high inflationary costs, with the trend continuing in 2024 led by the iconic department store, Macy’s.
In 2023, retail stores, pharmaceutical and fast-food chains continued a trend of previous years: declaring bankruptcy and closing their doors or shutting down some locations to cut costs, citing inflation, higher costs, and profit losses.
Last May, discount retailer Tuesday Morning announced it was closing its doors nationwide after being in business for 49 years. Home goods chain Christmas Tree Shops filed for bankruptcy and liquidated all of its stores as did the largest bridal-store chain in the U.S., David’s Bridal, laying off tens of thousands of employees.
Sears, once the largest retailer in the world with more than 700 stores in the U.S., shuttered hundreds of locations. Now, only 12 stores remain open.
New York-based specialty athletic retailer Foot Locker also announced it was closing 400 stores in North America by 2026, after reporting sales, gross margins and net income losses.
Pharmaceutical giants CVS and Walgreens also closed stores as cost-cutting measures. CVS announced it planned to close 900 locations by the end of 2026; with store closures came diluted earnings per share for shareholders. After reporting over $170 million in earnings losses, Walgreens announced it was closing 450 stores to cut costs.
Fast food chains Pizza Hut and Boston Market also closed locations in multiple states, with Boston Market’s failure to pay wages resulting in regulatory action in New Jersey and litigation in Arizona and Massachusetts.
Now, at the beginning of 2024, the iconic department store Macy’s announced it is closing five stores nationwide and laying off 3.5% of its workforce, or 2,350 employees, to cut costs, the Wall Street Journal reported. “Despite our strong and tangible progress over the last few years, we remain under pressure,” its outgoing CEO Jeff Gennette said in a memo obtained by the Journal.
Since President Joe Biden took office in January 2021, inflation and prices for all goods and services soared, initially breaking 40-year record highs. As prices and costs go up, wages have gone down, “placing additional stress on family finances,” The Heritage Foundation’s “Biden Inflation Tracker” notes.
From January 2021 to November 2023, Heritage notes that real disposable income has dropped by 7.5%, home ownership affordability has dropped by over 37%, credit card debt has increased by over 36% and Americans’ monthly savings have dropped by over 81%.
Over the same time period, consumer prices increased by more than 17%, gas prices increased by over 50%.
Despite recession predictions, the economy expanded slowly last year. But as a result of the Federal Reserve increasing interest rates, increased congressional spending, and other factors contributing to increased inflation, by late December 2023, the national debt surpassed $34 trillion for the first time in U.S. history. In fiscal year 2023, the administration and congress ran a deficit of at least $1.7 trillion.
Major store closures and ongoing inflationary concerns continue as only 39% of likely U.S. voters recently polled expressed a favorable view of Biden’s job performance as president.
