Joann set to close all store locations under new ownership
Joann, the fabric and craft retailer, is set to close all locations after being auctioned off to a new ownership group.
unbranded – Newsworthy
Consumers are going to have fewer places to shop as in-person retail stores continue to close, but it remains to be seen whether shoppers will have less choice or have to pay more.
Joann earlier this week became the latest retailer to announce that it will shutter all of its stores as it was auctioned under new ownership. The retailer will close 800 stores nationwide.
That comes on top of other retailers announcing specific location closures, such as JCPenney, Macy’s, Big Lots and Kohl’s.
Store closures are still small in relation to all stores
Neil Saunders, a retail analyst at the research and analytics firm GlobalData, said “while there will be store closures this year, the number closing is a small fraction of the total number of physical stores. So, consumers will still have plenty of places to shop and plenty of choice.”
While there are store closures, on a net basis, as of last Monday, it is about even in terms of store openings for the year, said National Retail Federation (NRF) Executive Director of Research Mark Matthews.
Holiday sales were strong and 4% above the retail group’s projections, reaching a historical high, said Matthews.
Matthews said he can’t discuss any specific retailers’ closures, but retailers close for various reasons, which could be a reflection of demographics around a particular retailer or competitive dynamics in the industry.
“I don’t think that people are buying less of what the stores sell. They’re just buying it in different places,” he said.
The U.S. is the most over-stored country, with “more stores than we’ve ever had before on a per capita basis.” But there is a seismic shift happening as consumers can now go to a store in person or buy through e-commerce.
Similarly, Michael Prendergast, managing director in global professional services firm Alvarez & Marsal’s consumer and retail group, said the U.S. retail environment has been in an expansion mode for decades. But we are now seeing the disruption of e-commerce to the brick-and-mortar model, which gives consumers many different access points for their goods, he said.
However, Prendergast said he still believes U.S. consumers “gravitate towards brick and mortar in an experiential experience” and so the competition among stores has exponentially increased.
Will stock and availability be affected by store closures?
Consumers in the short run will not have the same amount of choice as stores close, said Prendergast. But in the long-term, it will be up to competitors to decide what type of offerings they want to pick up from stores that have gone out of business, he said.
Some consumer groups, like the elderly who favor brick and mortar shopping or people without reliable internet access, will be disproportionately affected by closures, said Douglas Bowman, a marketing professor at the Goizueta Business School at Emory University in Georgia.
The large number of planned closures by Walgreens and CVS, for instance, have created “pharmacy deserts,” said Bowman, who researches consumer behavior and brand and product management.
Fewer physical stores may also mean it is harder to find an infrequently purchased product right away and longer wait times to buy it online and receive it, Bowman said.
Bowman, however, said retailers like Amazon and Walmart may see an opportunity to keep strengthening their e-commerce logistics to offer more products with store closures.
Will prices be affected by store closures?
Prices could be affected in two ways, said Prendergast. U.S. retailers are a highly promotional environment, so retailers who have competitors that have gone out of business may think “we don’t need to be as promotional” in offering deals, he said.
But online retailers may keep that pressure on retailers to hold prices in check, he said.
Bowman similarly said retailers could raise prices due to reduced local competition, but prices could also hold or even decline since e-commerce makes price comparisons easier for consumers.
Saunders does not believe store closures will “lead to a spike in prices because competition is very healthy. Even in a sector like crafts, you have Hobby Lobby and Michaels which compete with each other and with online giants like Amazon and generalists like Walmart.”
“Most consumers like using a mix of online and physical stores and I don’t see this dynamic changing all that much,” he said.
How many stores are going to close this year?
At least one firm is predicting the number of store closures this year to be double that of last year.
A total of 7,325 stores closed in the U.S. in 2024, according to Coresight Research, a research firm specializing in retail and technology. It was the highest number since Coresight recorded 10,000 closures in 2020, as previously reported by USA TODAY.
Coresight is projecting that 15,000 stores will close this year, offset by 5,800 stores set to open.
Mary Walrath-Holdridge contributed to this story. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
