The retail landscape in the United States is undergoing a profound transformation, marked by the widespread closure of many iconic mall stores and chains.
This shift is being driven by changing consumer behaviors, the growth of e-commerce, and economic pressures that have intensified since the late 2000s and accelerated during the COVID-19 pandemic.
The closures of major retailers such as Macy’s, JCPenney, and others are reshaping communities and affecting millions of jobs nationwide.
The Decline of Malls and Its Impact on Jobs
Anchor stores like JCPenney, which once formed the nucleus of any mall, are closing hundreds of locations. JCPenney, for example, has reduced its footprint from over 2,000 stores to just over 600 and is set to close another seven more by May 2025.
The closures directly affect the employees, leading to significant job losses in retail sales, management, and support roles. This has a ripple effect on a mall’s employees and local service workers, who depend on the traffic that these anchors generate.
Macy’s Massive Store Closures and Staff Reductions
Macy’s announced plans to close 150 locations by 2026, cutting roughly one-third of its locations. The downsizing is part of a strategic shift toward more profitable stores and online sales. The closures will mean thousands of layoffs, affecting full-time and part-time employees across several states.
Macy’s employees face uncertainty as stores in major metropolitan areas like New York and California shut down, impacting local economies and families dependent on these jobs. While some malls are struggling, others have found ways to keep the flow of foot traffic.
Surge in Retail Store Closures in 2025
Retail store closures in the United States are expected to more than double in 2025, with an estimated 15,000 locations shutting down, up from 7,325 closures in 2024.
The sharp increase highlights the challenges that brick-and-mortar retail is currently grappling with in the face of tough economic conditions and a consumer shift towards online retail.
Widespread Retail Sector Troubles and Job Losses
In addition to Macy’s and JCPenney, other mall staples like Foot Locker, Bath & Body Works, The Body Shop, and Express are also closing stores or filing for bankruptcy. These mass closures add to a growing wave of job cuts in retail.
Many employees face the challenge of finding new employment in a contracting sector with fewer physical stores and more competition from online retailers.
The Major Retailers Leading the Closure Wave
Several large chains are driving the surge. In 2025 alone, Party City, which also owns BalloonsDirect, will close 700 stores, Big Lots 600 stores, Walgreens 333 stores, and Macy’s 68 stores.
These closures signify a strategic retreat from underperforming locations as retailers restructure to survive in a rapidly changing market.
Economic and Social Consequences for Communities
The closing of malls and stores affects more than just retail employees. Local economies, from restaurants to service providers, suffer as reduced mall traffic leads to lower revenues for surrounding businesses.
Job losses in retail can increase unemployment rates and reduce consumer spending power, creating a cycle that further depresses local economic activity
The Shift to E-commerce
Online shopping has reduced demand for physical stores, prompting retailers to invest in digital platforms. Although this shift creates work in logistics, warehousing, and technology, it does not fully compensate for the loss of retail floor jobs.
Many displaced retail workers may not have the qualifications or opportunities to transition to these new roles, leading to longer-term employment challenges.
Mall Closures and the Decline of Social Spaces
The mall has long been a community hub and a social gathering place. In their decline, there are fewer public spaces for social interaction and local events, which can harm community relations.
The loss of jobs in these spaces also reduces opportunities for youth and part-time workers who often rely on retail employment as a first job or supplemental income.
Implications for Real Estate and Property Developers
Property developers like JBG Smith are closing down long-standing mall properties, such as the Crystal City Shops area near Washington, D.C.
These closures not only eliminate retail jobs but also impact maintenance, security, and service jobs associated with mall operations. The repurposing or abandonment of these properties can lead to further economic decline in affected areas.
Retail Bankruptcy and Its Workforce Fallout
Retailers like Big Lots and Express have filed for bankruptcy, prompting swift store closings and layoffs. Bankruptcy cases frequently lead to sudden job losses without severance, leaving many employees without financial safety nets.
The cumulative effect of multiple bankruptcies in the retail sector exacerbates job insecurity and economic hardship for affected employees.
Impact of Bankruptcy and Liquidations
Bankruptcy and liquidations are significant contributors to closures. Retailers such as Party City, which filed for Chapter 11 protection, are shuttering stores in droves in an effort to reduce debt and streamline operations.
Such abrupt shutdowns often leave employees without severance pay and communities facing economic hardship.
Decline in New Store Openings
As closures continue to rise, new stores are expected to decline slightly in 2025, from 5,970 in 2024 to around 5,800. The slowdown signals cautious expansion plans as retailers grapple with uncertain demand and higher operational costs.
Vulnerable Retail Sectors
“We don’t think it’s a matter of if, but when,” said Jamie Merriman, a retail analyst with Bernstein, who added that the risk is highest among some retail sectors, including hobbies and crafts, middle-market apparel, and discount stores.
Competition from online platforms like Shein and Temu intensifies pressure on physical stores, leading to closures in these sectors.
Economic Pressures Behind Closures
Consumer spending has also been squeezed by high inflation, rising interest rates, and price increases related to tariffs that have narrowed retailer profit margins.
Many of these stores, which are deemed unprofitable, are being closed as companies seek to optimize costs and focus on more lucrative locations or online channels.
Shift Toward Value Retailers
While many retailers are closing stores, value-focused chains such as Aldi and Dollar General are expanding.
These retailers benefit from consumers’ growing demand for affordability, suggesting a bifurcation in retail where discount formats thrive even as traditional stores contract.
Geographic and Community Impacts
Store closures disproportionately affect smaller towns and economically vulnerable communities, where retail jobs are a vital source of employment.
Reduced retail footprint leads to job losses, lower tax revenues, and diminished access to goods and services, exacerbating regional economic disparities.
Retailers’ Strategies Adaptations
Not all closures indicate failure; some are strategic moves to reshape store footprints. To stay competitive in an omnichannel retail environment, retailers are focusing on fewer, more profitable locations, enhancing digital integration, and improving customer experience.
Long-Term Outlook and Industry Transformation
Analysts caution that store closures could continue rising; UBS has estimated that as many as 45,000 U.S. stores could close by 2029.
The retail sector is undergoing a fundamental transformation, which will require innovation, operating efficiency, and adaptation to evolving consumer behaviors to survive and thrive.
The Future of Retail Employment
And as more and more retailers close stores and cut back on the size of their operations, the retail job market probably will continue to shrink. Displaced workers may confront a more challenging environment with fewer available jobs, wage pressures, and retraining requirements.
Communities must explore economic diversification and support programs to help workers transition to new industries.
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