Bethesda, Md. A new report from CoStar Group revealed that major U.S. retailers closed nearly 7,000 stores while opening approximately 5,700 new locations in 2008.
The result is a net loss of more than 1,000 stores for the year, according to research compiled by CoStar Group's news division. The net loss in store count, while not unexpected, follows several consecutive years of retail expansion and substantial net store growth.
The approximately 250 major retail chains CoStar included in this study have reported plans to open nearly 4,000 and close nearly 3,600 stores in 2009. However, if signs of an economic recovery remain elusive, retailers could adjust their store-opening guidance downward by mid-year, as they have the past two years.
In addition, the store-closing guidance issued by these retailers of 3,600 stores for 2009 will almost certainly increase, said CoStar, as additional retailers fall victim to the economy in the form of store closings and liquidations.
The major retailers CoStar sampled for this study opened nearly 6,500 stores in 2007 and 5,700 stores in 2008. If the nearly 4,000 planned openings are carried out in 2009, store-opening activity would be down a whopping 39%, in comparison to 2007 levels.
On a net basis, as a percentage of total store count, retailers in the pet supply, dollar store/deep discount, warehouse club, drug store, grocery, and big-box discount categories are projecting the biggest gain in stores in 2009, while retailers in the electronics, discount department, jewelry, apparel and office-supply categories are projecting the biggest loss in store counts for 2009.
Among those included in the CoStar analysis, the specific retailers planning to open the most U.S. stores in 2009 include Walgreens (540), Dollar General (450), CVS (275), Gamestop (250), Dollar Tree (235), Family Dollar (200), Walmart Supercenter (125), Aldi (80), Target (75), and Tractor Supply Co. (75).
Conversely, the specific retailers credited with the highest level of 2009 closings include Circuit City (567), Ritz Camera (400), Goody's (287), Steve & Barry's (252), Jones Apparel (225 - note this is for 2009 and 2010 closings), Blockbuster (150), Office Depot (118), Rite Aid (117), Zales (115), Gap (100), and Charming Shoppes (100).
In 2008, Linens ’n Things (589), Movie Gallery (530), Friedman's Jewelers (377), Whitehall Jewelers (373), Blockbuster (277), Ace Hardware (242), Rite Aid (200), Sharper Image (184), Mervyns (176), Charming Shoppes (156), Circuit City (155), Demo (153), Claire's (118), Value City (113), Waldenbooks (112), Transworld Entertainment (111), Zales (105), and CompUSA (103) are credited with closing the most stores -- this list is overwhelmingly comprised of retailers that liquidated in bankruptcy.