Why Big Retail Chains Are Closing Stores and Moving Online in 2025

Familiar names like Macy’s, Joann Fabrics, Walgreens, and Kohl’s are closing hundreds of stores in 2025. The trend isn’t just about poor sales—times have changed. More shoppers are choosing the ease of buying online, searching for deals, and getting products delivered faster than ever before.

Rising rents, persistent inflation, and stiffer competition from e-commerce leaders like Shein and Temu are squeezing brick-and-mortar stores. Even big brands with loyal customers are deciding it’s smarter and cheaper to move operations online than to keep underperforming stores open.

As you’ll see, this isn’t just about technology. Economic pressure, shifting habits after the pandemic, and changing consumer tastes are pushing this retail reset. Stores that once filled malls and city centers are trading in their physical locations for a digital future.

The Surge in Store Closures: 2025’s Defining Retail Trend

Physical stores are vanishing from the retail scene at a pace never seen before. What started as a steady trickle in years past is now a flood in 2025. National chains once seen as permanent fixtures are rethinking what it means to serve customers today. This shift isn’t just about who’s closing their doors—it’s about the scale and speed of the change, and what it signals about the future of shopping.

Major Retailers Shuttering Physical Stores

Shoppers in 2025 are watching some of the most familiar brands pull out of malls and shopping centers. Here’s a closer look at major names making headlines with closures and why they’re making these decisions:

• Macy’s: Macy’s is slimming down its brick-and-mortar presence. It’s closing more than 150 stores as it shifts focus to its digital operations and smaller-format stores that cater to local demand.
• Walgreens: Walgreens continues scaling back its massive footprint. Hundreds of locations are being shuttered to cut costs and address changing consumer behavior, including rising demand for online pharmacy services.
• Kohl’s: Facing slower in-person sales, Kohl’s is closing dozens of traditional storefronts while ramping up online offerings and experimenting with off-mall concepts.
• Joann Fabrics: Joann Fabrics announced closures of underperforming stores, citing competition from e-commerce and shifts in how people shop for crafts and supplies (source).
• Additional brands: Retailers like JCPenney, Volcom, Billabong, Roxy, and more are shutting down locations across the country, pointing to economic pressure and declining foot traffic (see full list).

These closures are rarely just about poor sales. Factors include rising rents, inflation, private equity pulling out, and the high cost of keeping underperforming stores open. As one executive from Macy’s put it, “the store of the future is digital-first.”

Statistical Overview of Retail Closures

The numbers in 2025 are staggering and tell the story of a retail shakeup:

• 15,000 closures expected: Analysts predict over 15,000 U.S. retail locations will close in 2025—more than double the 7,325 closures recorded in 2024 (Forbes retail closure report).
• Opening vs. closing: New store openings can’t keep pace. For every new location opening, multiple others are closing their doors for good (Coresight Research).
• E-commerce share: E-commerce now accounts for over 25% of total U.S. retail sales, a share that keeps rising as shoppers skip the trip and order from their phones and computers.
• Surge in shut-downs: The pace of closures is up 334% compared to last year, according to recent research (get the details).

What’s driving this wave? It’s a mix of consumer habits, digital convenience, inflation, staffing shortages, and a drive to cut losses. As brands focus on where customers are shopping—increasingly, that’s online—the good old shopping trip isn’t what it used to be. The numbers prove that 2025 is the year when “store closing” signs truly became the new normal.

Underlying Drivers: Why Physical Stores Are Closing

Retail closings in 2025 aren’t random—they follow patterns fueled by new technology, shifting economic winds, and changing lifestyles. Let’s break down what’s driving this shakeup and why even the biggest names are rethinking stores as we know them.

The Dominance of E-commerce and Online Giants

Amazon, Temu, Shein, and other online giants are changing how people shop everywhere. Their speed, low prices, and endless choices make it tough for physical stores to compete. For many shoppers, clicking “add to cart” feels easier than hunting for a parking space.

• Amazon’s influence: The company’s fast delivery and huge selection force others to match prices or lose out.
• Rapid expansion of fast-fashion: Brands like Shein can launch new looks faster and for less money than traditional chains, capturing trends before competitors.
• E-commerce reach: Online platforms don’t have to pay for expensive storefronts or as many employees, meaning more money can go toward offers and marketing.

E-commerce has brought convenience and reach that brick-and-mortar stores struggle to match. Customers expect the same experience and prices everywhere, which is almost impossible for retailers with big physical footprints. Much of this shift is explained in reports like The Impact of eCommerce on Traditional Retail and The Rise Of E-Commerce And Its Impact On Brick-And-Mortar Stores.

Changing Consumer Preferences and Expectations

Shoppers don’t just want deals—they want things fast, easy, and on their terms. That’s why more people are skipping store visits for online shopping.

• Convenience wins: You can shop in your pajamas, compare prices instantly, and get items dropped off at your door.
• Price transparency: Online shopping puts all options—and deals—at your fingertips, making it hard for physical stores to hide higher prices.
• Frictionless experience: No long lines, no pushy salespeople, and no out-of-stock surprises. Online shopping gives more control and less hassle.

These trends have deep roots. People’s shopping habits changed during the pandemic, and many don’t want to go back. The pace and ease of digital shopping have set a new standard, making traditional in-store visits feel slow and clunky by comparison.

Economic Pressures Accelerating the Shift

Behind every “Store Closing” sign, there’s usually a stack of numbers pushing the decision. Rising prices, tighter wallets, and ongoing supply chain snags are just a few of the problems retailers face.

• Inflation: As the cost of rent, wages, and goods goes up, profit margins shrink.
• Reduced discretionary income: Families spend less on non-essentials when bills get higher, which means fewer shopping trips.
• Pandemic aftershocks: Labor shortages and higher operational costs haven’t disappeared since 2020. Many stores never fully bounced back.
• Interest rates: Borrowing money to keep a store open or remodel is more expensive—sometimes too expensive to make sense.

This perfect storm makes it harder for physical locations to stay profitable. A recent analysis in Economy Insights highlights rising operational costs like rent and wages as some of the biggest burdens. Retailers are facing economic hurdles that simply didn’t exist at this scale before, and as reported by SFL Media, even big brands are feeling the strain.

Store closures aren’t just a reaction—they’re a strategic move in a world where digital efficiency and tight budgets rule. Brands follow the numbers and consumer demand, deciding that sometimes, closing the doors is the smartest play.

E-commerce’s Impact on Traditional Retail and Real Estate

The online shopping boom isn’t just changing how people shop—it’s reshaping how stores use their physical spaces and what real estate investors value. Some retailers are closing the doors for good. Others are giving their spaces a new purpose or focusing on locations that still draw steady crowds. Here’s what’s really happening as e-commerce and traditional shopping mix in new ways.

Omnichannel Strategies and Logistics

Big brands aren’t just giving up on storefronts. Many are turning them into mini-warehouses, local pickup spots, and fast return centers. This blend of online and in-person service is called “omnichannel,” and it’s rewriting the playbook for physical retail.

• Fulfillment hubs: More stores act as local centers to ship online orders. Brands can fill orders faster and save on shipping by sending packages from a nearby store instead of a far-off warehouse.
• In-store pickup: Customers love buying online and picking up their purchases in person. It skips shipping fees and lets people shop on their own schedule. The number of people choosing in-store pickup has soared, making it a must-have for any big retailer.
• Hybrid returns: It’s easier than ever to return online orders at a local store. This cuts shipping hassle for customers and brings foot traffic back to locations that might otherwise be quiet.

These changes mean store layouts and staffing are evolving, too. More space goes toward packaging and storage instead of displays. Employees juggle order fulfillment and customer service. Stores become part shopping spot, part logistics center. For a deeper look at how these trends are transforming retail properties, see this insight on e-commerce fueling real estate innovation.

Resilience of Certain Retail Formats and Properties

While many malls and shops struggle, some types of retail locations are showing real staying power. Not every place is at risk of going dark—some are busier than ever.

• Grocery-anchored shopping centers: Stores anchored by major supermarkets keep drawing steady crowds. People still want to shop in person for food and essentials, making these centers a reliable bet for both retailers and landlords.
• Discount stores: Budget-minded chains like Dollar General, Aldi, and others are growing. Their low prices and wide reach attract shoppers even when money is tight. They tend to thrive in spots where bigger retailers are backing out.
• Experiential retail: Locations offering entertainment, restaurants, pop-ups, or services keep foot traffic strong. People still enjoy experiences they can’t get online—whether it’s an escape room, a group fitness class, or a hot new food spot. These spaces give shoppers a reason to visit, even as routine shopping moves online.

Recent industry reviews highlight that, despite the shift to web-based shopping, categories like grocery, discount, and experiential retail are helping to balance out vacancies elsewhere. Experts tracking commercial real estate trends in 2025 expect these segments to continue outpacing other property types. For more analysis on this shift, check out these 2025 commercial real estate property outlooks.

While online shopping is cutting into traditional retail, it’s also forcing stores and property owners to adapt quickly—or risk falling behind. The stores that survive often look nothing like the ones from just a decade ago.

How Retailers Are Responding to the Online-Only Era

Retailers aren’t folding quietly as shoppers move online. They’re making big moves to connect with customers in new ways, invest in technology, and build smarter operations. There’s real thought and creativity behind what’s happening now—and it’s not just about putting products online. Let’s look at how stores are racing to meet customers where they are with smart strategies that go far beyond a website and checkout cart.

Leveraging AI, Personalization, and Digital Tools

Major retail brands are using artificial intelligence (AI), data analytics, and clever digital tools to help guide every interaction. AI is no longer just hype; it’s working behind the scenes to create smoother, faster, and more personal shopping experiences.

• Personalized recommendations: Algorithms track what shoppers click, search for, and buy. This lets retailers offer spot-on suggestions, from a pair of shoes you’ve eyed before to new launches that match your style.
• Chatbots and instant help: AI-driven chatbots answer questions, process returns, and solve problems in real time. Shoppers can get instant answers if something goes wrong—no waiting on hold.
• Dynamic pricing: AI scans the market and adjusts prices based on demand, competition, or shopper loyalty, keeping things competitive and fair.
• Inventory and supply chain optimization: Predictive analytics have transformed inventory. Stores know what’s selling, where to ship it, and how to avoid empty shelves by reading real-time data.

This digital toolbox is driving better results. According to the latest retail technology trends for 2025, brands that use advanced AI and analytics stay ahead of changing trends and consumer demands. Advanced analytics not only guide what to stock, but also predict future trends, helping stores run more efficiently (full industry outlook).

Reimagining Customer Experience Online

Retailers know the old in-store experience—wandering aisles, chatting with staff, sampling products—can’t just disappear. They’re rethinking what customer engagement looks like when it happens through a screen.

• Virtual try-ons and AR tools: Shoppers can see how clothes, glasses, or makeup will look using their phone’s camera. Augmented reality (AR) lets customers try before buying from their living rooms.
• Livestream shopping: Brands host live video events where hosts show off products, answer questions, and offer special deals. It’s like shopping TV for the internet, building excitement and community.
• Interactive content: Product demos, how-to videos, and 360-degree images help shoppers get a real sense of what they’re buying, boosting confidence in online purchases.
• Loyalty and rewards digital tools: Digital loyalty programs make shoppers feel special with tailored perks, bonus points, and targeted offers delivered right to their phones or inboxes.

These innovations go beyond copying the in-store experience—they aim to surpass it. Customers get convenience plus the immersive feel they used to find in stores. As outlined in these retail industry predictions for 2025, the goal is a smooth journey from browsing to buying, personalized at every step.

Retailers are using tech to blend the best of both worlds: personalized service, real interaction, and digital convenience. This is how stores are staying competitive and exciting, long after the last physical location closes its doors.

What the Future Holds: Retail in a Post-Physical Store Era

As retailers close their physical doors and move online, an entirely new way of shopping is taking shape. This isn’t just a trend—it’s a reset that touches every part of daily life, from how we buy shoes to what fills city streets. The shift brings big changes for shoppers, for workers, for brands, and for the places we call home. Here’s what’s coming next as the digital store becomes the new storefront.

How Consumers Will Shop Tomorrow

Shopping online will feel more personal and even more convenient. With no aisles to wander, people will see tailored product options, use smart filters, and get one-on-one customer service—even through a screen.

Expect these changes to become the new standard:

• Ultra-fast shipping: Next-day or even same-day delivery will be common, making last-minute purchases stress-free.
• Advanced virtual experiences: Shoppers will use apps and AR to see furniture in their living room or try on clothes virtually before buying.
• Seamless returns: Simple return policies and nearby pickup boxes make sending things back easier than ever.

Buying from home will keep getting easier, but it could mean less chance for casual browsing or impulse shopping. It’s trading window shopping for a digital “just for you” display every time you log in.

The Impact on Cities and Local Communities

With big chains leaving shopping centers, city leaders and developers will need new plans for empty streets and malls. But this doesn’t mean the end of vibrant neighborhoods—it just shifts the way people use public spaces.

Look for these changes:

• Repurposed malls and stores: Vacant spaces become homes for gyms, indoor playgrounds, markets, or community centers.
• Mixed-use developments: Shopping centers will mix housing, offices, and event spaces for more around-the-clock activity.
• Rise of pop-ups and local makers: Without the pressure of big chains, small businesses and makers can use short-term pop-up spaces or local markets.

Empty storefronts are tough to see, but they can open the door for new community events, creative businesses, and even affordable housing, as explored in adapting to retail’s future.

Working in Retail: Shifting Roles and New Skills

The digital shift changes what retail jobs look like. Traditional cashier and sales roles will shrink, while demand for tech-savvy workers, delivery drivers, and customer service pros will grow.

Here’s what workers can expect:

• Remote and flexible work: Many support roles will move online, allowing for work-from-home options.
• New skills in demand: Tech, logistics, online marketing, data, and customer support are becoming the foundation of the modern retail workforce.
• Fewer entry-level store jobs: Young people looking for starter jobs may need to pivot to warehouse teams, call centers, or learn online selling.

This shift raises real questions about training and job access, but it also creates opportunities for people ready to work in a more digital world.

The Brand Challenge: Building Trust Without a Storefront

Retailers can no longer rely on an impressive window display and a friendly greeter. The race is on for brands to build trust, create excitement, and keep people coming back—all without a physical store.

Successful brands will:

• Invest in digital branding: Social media, influencer partnerships, and creative content become central to staying top of mind.
• Prioritize service and support: Fast replies and easy help build loyalty in a world where patience is short.
• Focus on unique experiences: Livestreams, virtual shopping events, and interactive platforms bring back the lost “personal touch.”

For many companies, going digital isn’t just about cutting costs. It’s a test of creativity and connection that will separate strong brands from forgettable ones. The future will reward the innovators who can humanize a digital shopping experience, as highlighted in these predictions on the future of retail stores.

What Happens Next? Continuous Change Ahead

This era of online-only retail isn’t finished. As technology keeps moving, expect even bigger shifts:

• AI will get smarter: Shopping assistants and chatbots will anticipate needs, answer questions, and even bargain for customers.
• Home delivery will reinvent itself: Think drones, robots, and smart lockers that make getting packages even easier.
• Sustainability will go mainstream: Eco-friendly packaging, circular shopping (resale, rentals), and less waste will become big selling points.

For shoppers, brands, and cities alike, the story is still being written. Change is the only constant as retail heads into a future where “the store” is everywhere you are, not just on Main Street.

For a deep dive into how this new reality might take shape, check out MIT’s perspective on the future of physical retail.

Conclusion

Retail is changing fast, driven by rising costs, new technology, and shoppers who want convenience above all. Major chains aren’t just reacting—they’re making smart moves to meet customers online, cut losses from slow stores, and find new ways to stand out. This wave isn’t just about closing doors; it’s about choosing the best way forward in a world where digital shopping sets the standard.

As the old storefronts fade, businesses and shoppers alike have a chance to adapt and thrive. Brands that invest in better online experiences, creative service, and real connection will keep people coming back. For those shopping and working in this new space, learning new skills and finding what matters most—speed, trust, simplicity—will matter more than ever. Thanks for reading. How will you take on the future of shopping? Share your story or thoughts below.