2022 retail store opening rumble
Physical store openings exceeded closings on an annual basis in 2022 for the first time since 2016, Coresight Research found.
Why it matters: Retailers are on pace to open even more stores this year than last, at a rate of 3-to-1, Marie Driscoll, a managing director at Coresight tells Axios.
The big picture: A retailer's ability to open stores is essential for growth and future investment and is a hallmark private equity investors look for.
- There were more than 5,000 store openings announced compared with just over 2,600 closings.
- Retail could also receive a boost if remote workers return to the office this year, though workers may push back against company mandates. The jury is still out on that, Driscoll says.
Of note: Simon Property Group, the U.S.'s largest mall owner, reported earlier this week that occupancy was nearly 95% as of Dec. 31, a year-over-year increase of 1.5%.
Between the lines: Robust e-commerce platforms helped retailers manage the pandemic.
- However, both retailers and consumers realized the limitations of doing business entirely online.
- Once the height of the pandemic passed, shoppers returned to stores in hordes.
Details: A big driver of store openings are shoppers seeking bargains, especially at dollar stores with a limited or non-existent presence online, Driscoll says.
- The top six retailers opening stores in 2022 were dollar chains and discounters, including Dollar General, Family Dollar, Dollar Tree, Five Below, TJX Cos. and Aldi, in that order.
- The top chains closing stores included CVS Health, Circle K-parent Alimentation Couche-Tard, Sears Hometown (which filed for bankruptcy), Foot Locker and Rite Aid (which is distressed).
- While Family Dollar opened 393 locations, it also closed 103, according to Coresight's estimate, indicating some retailers are simply repositioning their existing fleets, Driscoll notes.
What's next: Dollar General, Five Below, and convenience store chain Wawa are plowing ahead to add to their hundreds of locations to their store counts this year.
Yes, but: CVS will continue to pare down the number of its stores this year, as pharmacy chains recalibrate generally. Like last year, it remains at the top of the list.
- Bed Bath & Beyond is estimated to close 202 stores this year, though that number will likely increase. Unleashed Brands told Axios it is interested in taking on at least some of those leases.