More and more companies are declaring bankruptcy or ceasing operations due to inflation and rising costs.
Inflation and the economy remain top issues for all voters, according to a recent Center Square Voter Poll.
According to a recent analysis by CoreSight Research, retailers plan to close about 3,200 stores this year.
This represents a 24% increase in closures over 2023.
Drugstore and pharmacy closures in the U.S. have led to the shuttering of 8 million square feet of retail space this year, according to the research firm.
It also noted that retailers are losing stock and customers to theft, and that “retail shrinkage” goes hand in hand with “organized retail crime.”
Of the 3,200 stores closing, the majority are about 30 retailers, with Family Dollar closing the most with more than 600 stores, according to the data. CBS News reported.
Tupperware is the latest company to announce it will permanently close its last operating manufacturing plant in the United States, in Hemingway, South Carolina.
All 148 of the company’s employees will be laid off in September, with layoffs to be phased in until January next year.
Tupperware announced last week that it plans to continue making products at its factory in Lerma, Mexico.
The iconic plastic packaging company is selling real estate and also dealing with a non-compliance notice from the New York Stock Exchange. Plastics Today reported.
Teen apparel retail chain Rue21 also filed for bankruptcy last month and announced it would close all 540 of its stores.
The Pittsburgh-based retailer is $200 million in debt and is laying off all 4,900 employees, citing “poor retail performance, inflation and macroeconomic headwinds.” CNN reported.
California-based discount retail chain 99 Cents Only filed for bankruptcy in April, citing significant and persistent challenges in the retail environment over the past few years. The Los Angeles Times reported. All 371 stores will be closed.
Other companies closing this year include CVS Health, 7-Eleven, Rite Aid, Express, Walgreens Boots Alliance, Macy’s, The Body Shop, Soft Surround, Burlington Stores, Foot Locker, Carter’s Big Lots, Dollar General, Abercrombie & Fitch, Big Lots and Best Buy, according to the CoreSight analysis.
The trend in store closures is up compared to the number of stores closing in 2023, Center Square reported.
Last year, retailers, pharmaceutical chains and fast-food chains continued the trend of declaring bankruptcy and closing stores or closing some locations to cut costs, citing inflation, high costs and losing profits.
This January, the trend continued, with iconic department store Macy’s leading the way.
Inflation has also hit the auto insurance market, with premiums rising 26% nationwide in one year and expected to remain high through 2025.
Prospective homebuyers aren’t immune to inflation either: A Center Square report found that to buy a home in 2024, people will need to earn 80% more than they did in 2020.
Americans are also struggling at grocery stores.
“It’s the first time in 30 years that food has taken up such a large portion of my income.” The Wall Street Journal reported.The company noted that rising costs of transportation, fuel, raw materials, services and labor are leading to higher prices for food manufacturers, grocers and restaurants.
Food inflation, most evident by rising prices and falling quantities, known as shrinkflation, was first reported in 2022 by The Center Square.
Earlier this year, former Home Depot and Chrysler CEO Bob Nardell warned that more layoffs would come because high interest rates were “killing” low- and middle-market businesses, The Center Square reported.
One key indicator of the health of the economy is consumer spending, and while it hasn’t yet slowed, economists say there are warning signs because much of it is financed with debt.
He added that consumers are also struggling to repay their debts.
Earlier this year, economist David Rosenberg of Rosenberg Research warned that delinquencies on credit cards and auto loans were also rising as total credit card debt hit a record $1.13 trillion.
“As far as consumer credit is concerned, the default cycle is not merely looming, it has already arrived,” he wrote in the economic report.
According to a recent The Center Square Voters’ Voice poll conducted in partnership with Noble Predictive Insights, inflation/rising prices (45%) and the economy/jobs (24%) are voters’ top concerns.
“Inflation is an important issue for Democrats, Republicans and true independents,” David Byler of Noble Predictive Insights told The Center Square. “Every political group thinks it’s important.”
