Party City closing all stores and Big Lots "going out of business" sales

As public officials continue to tell us the economy is going well, the Retail Apocalypse continues apocalypting in the background.  The word just came out that Party City is shuttingdown all of its  stores, and also that Big Lots is bankrupt and beginning "going out of business" sales.  Two more well known national chains of retail stores are going under.  This video above tells the story of the rise and fall of Party City.  It's December 20th, 2024 as I write this, office Christmas/holiday party season, and a week and a half before New Year's Eve.  Did everyone stop partying?  

I live in the San Fernando Valley these days, a place where there's a lot of wealth in the general area.  But one Big 5 just closed, and a Guitar Center store just closed as well, not to mention all of the 99 Cents Only stores that all closed down months ago.  This is in an area where there are hundreds of "mom and pop," privately owned, brick and mortar stores that are still in business.  But as the flood of pandemic stimulus money got spent, business has slowed back down for many stores, and major shutdowns are happening again.  Here's a video about the downfall of Big Lots.

The Rise and Fall of Big Lots

There are a whole bunch of reasons for these stores closing down, like the rise of online sales, getting bought out and loaded up with debt by private equity companies, and the sales slowdown of the pandemic.  These factors are part of the bigger picture of why these particular chains have closed down.  In any case, two more chains are going under, and hundreds of large stores are going to become vacant soon in cities across the United States.  

The term "Retail Apocalypse" popped up around 2016, as chain store closures and dead malls became a trend.  In reality, many stores had been closing for a decade before that, but those closures increased dramatically around 2015-2016-2017, as online sales surged.  Chalk up a couple more large chain closures to the list of dozens of other retail chains that have become extinct, like Toys-R-Us, Radio Shack, and others.  

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As the recession deepens, the Retail Apocalypse continues...

As most of you know now, the response to the Covid-19 pandemic by The Fed and U.S. government created about $6 trillion in new money, which it pushed into the U.S. economy.  The reason was to buoy up the economy during the mandatory lockdowns.  All this money put the Retail Apocalypse, the closing of thousands of retail stores in the last decade, on hold for three years or so.  Now that consumers have hit the wall financially, the Retail Apocalypse is gaining steam again.

This video lists over 5,200 individual store closings that have already been announced, and most of them will happen this year.  These are not all of the companies closing stores down, just 15 of the big ones.

While that $6 trillion in newly created money made most of us Stimulus Ballers for a while, that money has been spent by consumers, who are now largely broke, and saddled up with high debt again.  That means that ginormous amount of money has mostly flowed into the investment world, where major corporations and ultra wealthy individuals invested it in "assets."  Those assets, which have soared in value since 2020, are stocks in the U.S. stock market, residential real estate, and some other assets like crypto, and collectibles, to a much smaller degree.  

Along the way, when everyday people were flush with cash, retail stores caught a break, and the Retail Apocalypse got put on hold for a while.  People had money, some were hitting brick and mortar stores regularly, and they stayed in business for a while longer.  But the recession that started in 2020, then got put on hold by all that new money, is setting in again.  This time there's nothing visible to stop a recession from happening.  The main economic countries of the world, China, Japan, Europe, and the U.S., are all slowing down, and consumers are struggling worldwide.  That has, once again, slowed down sales in the tradition brick and mortar stores retail world, and thousands of stores are closing down again.  

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The Retail Apocalypse continues... at least 1,450 more drug stores to close in 2023-2024

 As the "not a recession" economic malaise continues in the U.S., drug stores are struggling.  In this CNN article today (10/17/2023), we learn that Rite Aid went into chapter 11 bankruptcy this past Sunday.  Hmmmm... I didn't see that on the news over the weekend.  Nothing like a televised war and genocide to keep people from thinking about the U.S. economy.  In the article, reading down a bit, we learn that Rite Aid plans to close 400 to 500 more stores, CVS plans to close 900 more stores, and Walgreens plans to close 150 more stores.  I say more stores, because these chains closed a lot of stores in 2015-2020, and some stores since.  That's a lot of stores.  

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Retail Apocalypse: 20,813 retail stores closed or planned to close, in the last 2 1/2 years

According to this CNBC article (June 5, 2019), discount stores like Costco, Walmart, and Target are doing well, while 7,150 retail store closings have already been announced for 2019, to add to the 5,524 in 2018, and 8,139 in 2017.  That's 20,813 stores already shuttered or planned to this year.  I've heard much higher numbers from 2017-18, so I think this just counts major national chain department and  retail stores, but it isn't clear in the article.  In addition to these 20,000+ closings, there were at least 5,000 to 10,000 more closings in 2010-2016. 

Multiple sources over the last 2 or 3 years have reported that 400 of the 1,100 to 1,200 shopping malls in the U.S. were expected to close between about 2016 and 2021 or so.  Some have closed, I haven't heard an exact number, but probably a few dozen in the past ten years.  The website Dead Malls.com has stories and reports from many still open dead malls, which means they're either closed, or below 70% occupancy.

My thinking is that this is the collapse of the Industrial Age distribution system, as the Information age distribution system takes over, like Amazon, Ebay, tens of thousands of small online stores, and online sales/in store distribution through major stores like Walmart and Target.  I call this decades long transition from the Industrial Age to the Information Age "The Big Transition." Here's my latest blog post explaining this idea. 

At least 25,000 to 30,000 stores closed this decade, and we haven't hit a recession... yet.