Retail Shakeup: Kroger, Claire’s Announce September Store Closures
September 12, 2024 – A wave of store closures is impacting shoppers nationwide as both Kroger and Claire’s announce plans to shutter locations by the end of September. The moves reflect a broader trend of retail consolidation and a focus on profitability amid shifting consumer habits and economic pressures.
Kroger, one of the nation’s largest supermarket chains, is streamlining its operations, resulting in the closure of several underperforming stores. The company did not respond to a request for comment from Newsweek.
Drew Powers, founder of Illinois-based Powers Financial Group, explained the challenges facing the grocery giant. “Kroger is in an unachievable situation. They are caught in the aftermath of last year’s failed merger attempt with Albertson’s, breach of contract lawsuits from Albertson’s and othre grocers involved in the failed merger, allegations of price fixing and deceptive practices, the sudden departure of their CEO amid an ethics inquiry; all on top of pressure from online grocery retailers and a consumer shift away from brick and mortar shopping,” Powers told Newsweek. “Kroger is forced to pare back and focus on only the most profitable locations under their brand name, as well as their subsidiaries like Mariano’s, Pick’n Save, and Harris Teeter.”
The closures come as the retail landscape undergoes important change. Online grocery shopping continues to gain traction, and brick-and-mortar stores are facing increased scrutiny over profitability.
Fashion and jewelry retailer Claire’s is also facing financial headwinds, filing for bankruptcy in August with $690 million in debt. The company, which operates over 2,300 locations globally, is struggling with strong competition, rising mall rental prices, and increased costs due to tariffs. claire’s is actively seeking a buyer and faces the possibility of complete closure if one isn’t found.
Financial literacy instructor Alex Beene, from the University of Tennessee at Martin, highlighted the broader trend. “When it comes to retail, 2024 has become the year of efficiency, as many companies are taking a hard look at the bottom line and what stores are underperforming and how to solve that issue. For some retailers, the answer is to simply close them, citing continued issues with profitability among other issues that may apply to certain storefronts. While some may point the finger at these closures to crime or other social factors, the reality is it all comes down to the dollars and cents behind running individual stores,” Beene told Newsweek.
Powers added a cautionary note for consumers. “Consolidation in the retail sector is not a good thing for consumers. Coupled with recent inflation, a lack of competition and possibly higher prices will truly hurt shoppers.”
Shoppers can expect the announced stores to close by the end of september, with closing sales anticipated as the chains work to liquidate remaining inventory. these closures represent a significant shift in the retail sector, signaling a continued emphasis on efficiency and profitability in a rapidly evolving market.
