Nearly 140 million square feet of retail space is expected to become available as announced store closures exceeded openings last year. Retailers announced closures of more than 9,900 locations over the past year, led by discount and dollar stores, drug stores and apparel stores, according to JLL’s retail market outlook.
Meanwhile, retail openings for 2024 and the beginning of 2025 total more than 7,700 new stores. Nearly 3,000 of these locations are restaurants, with particularly strong performance from fast casual and quick service restaurants. Grocery stores also had strong opening numbers, boosted by Aldi’s announced plans to open 800 new stores by 2028. Discount and dollar stores, including Dollar General and Burlington, also had strong opening numbers despite closings at Family Dollar and Big Lots, said JLL.
“We’re seeing a clear acceleration of closure announcements over the last several months, many stemming from bankruptcies where retailers plan to liquidate their entire portfolio,” said the report.
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Many closures are big boxes or junior anchors, including Party City, Walgreens, Rite Aid, Planet Fitness and Badcock Home Furniture, which range between 10,000 and 20,000 square feet. Nearly 2,700 such locations in this range have closed or are scheduled to close.
Big boxes between 20,000 and 50,000 square feet will see roughly 1,530 locations close, including Big Lots, 99 Cents Only, American Freight and Dirt Cheap. Large stores and anchors over 50,000 square feet – including Macy’s, Stop & Shop, Target and the RoomPlace – will close a total of 200 locations.
Spaces under 5,000 square feet will account for 1,274 closures and spaces between 5,000 and 10,000 square feet will account for nearly 2,800 closures. These include 7-Eleven, rue21, Foot Locker, Advance Auto Parts, Family Dollar and Lumber Liquidator, the report said.
Retail leasing is shifting toward experienced-based tenants, with growing consumer demand for services and experiences over goods.
“While the momentum of this growth was short-circuited by COVID, the last three years have seen a recalibration of this trend,” the report said.
Service-based tenants are expected to lease more retail space than goods-based tenants this year. Food & beverage accounted for 21% of leasing activity from January to November 2024, followed by fitness at 12% and healthcare at 6%. QSRs and fast-casual restaurants are driving F&B expansion, with McDonald’s, Chipotle, Dunn Brothers Coffee and Potbelly performing well. Alloy Personal Training, Planet Fitness and Club Pilates are standouts in the active fitness category. Health tenants include urgent care centers, dentists and opticians, said JLL.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
