Store Openings are Outpacing Closures in 2021: Coresight

Dive Brief:

• Even with the COVID-19 pandemic still weighing on physical retail, retailers in the U.S. collectively plan to open 3,344 stores so far this year, according to a recent Coresight Research report.
• That is 39.5% more openings than announced at this point last year and also well ahead of the 2,649 closures announced so far in 2021. In recent years, closures have far surpassed new stores.
• Among those planning new stores for this year are Dollar General, which plans to add more than 1,000 locations in 2021, as well as Dollar Tree, Family Dollar, Five Below, Big Lots and Burlington.

Dive Insight:

Last year brought a massive wave of store closures and bankruptcies. Shuttered stores totaled out at 8,960 — nearly triple the 3,307 openings that Coresight logged for the year. The closure figures were driven by bankruptcies, liquidations and right sizing, all with COVID-19 raging in the background.

With vaccines rolling out and hope for some semblance of a return to normal, retailers have reason to be confident in a return of foot traffic. Among those planning to add new stores this year are specialty and apparel stalwarts, including Sketchers USA, Ulta Beauty, Sephora, Foot Locker, American Eagle’s Aerie and Dick’s Sporting Goods.

Analysts have predicted a comeback for many categories hit hard by the pandemic, including apparel, which stands to benefit while shoppers return to malls and refresh their wardrobe, as they leave more for work and social outings sacrificed during the pandemic.

But the lion’s share of openings are by discounters. Dollar General, which made huge gains in 2020, accounts for nearly a third of the total store openings across retail. Among other efforts, the dollar retailer in 2021 plans to expand its Popshelf concept that targets suburban women.

Dollar Tree is also expanding, with 335 stores announced so far, including a newer concept that combines its namesake banner with Family Dollar aimed at underserved rural areas.

Dollar stores and off-price retail have expanded rapidly since the Great Recession, as consumers broadly seek value and the middle class shrinks amid growing income equality.