Major Retail Chains Set to Close Physical Stores in 2023 Amid E-Commerce Growth

This comprehensive article explores the major retail chains planning to close physical stores in 2023. Driven by the rise of e-commerce, shifting consumer behaviors, and economic challenges, brands like Morphe Cosmetics, Party City, Kroger, Sears, Signet Jewelers, and Macy’s are adjusting their physical presence. The article highlights the reasons behind store closures, the impact on consumers, and the future of retail in a digital-first world. Understanding these industry shifts helps consumers and investors anticipate changes and capitalize on emerging opportunities in retail markets.

Major Retail Chains Set to Close Physical Stores in 2023 Amid E-Commerce Growth

In recent years, the retail landscape has experienced a profound transformation driven by the rapid expansion of online shopping platforms. This shift has prompted many leading brands to reassess their physical store strategies, leading to an increasing number of store closures scheduled for 2023. Although some customers still prefer the tactile experience of in-store shopping, the declining foot traffic, rising operational costs, and evolving consumer preferences are compelling retail giants to pivot online or shutter their brick-and-mortar locations altogether. This article explores the notable store closures anticipated in 2023 and how these changes reflect broader industry trends.

Morphe Cosmetics
Morphe, a well-known beauty and cosmetics brand with approximately 18 retail stores spread across the United States, is preparing for substantial transformation. Its parent company, Forma Brands, recently announced plans to liquidate all Morphe physical stores and file for bankruptcy. This decision aligns with a broader industry trend where cosmetic companies shift focus to e-commerce channels due to declining mall foot traffic and the increasing popularity of online beauty shopping. Established in 2008, Morphe's shutdown marks a significant milestone after 15 years of retail presence, underscoring the challenges faced by traditional brick-and-mortar beauty retailers in a digital age. Despite the closures, customers will still be able to purchase Morphe products through online platforms, ensuring continued access to their favorite cosmetics and skincare items.

Financial constraints, rising operational costs, rent increases, and legal challenges have all played roles in Morphe's decision to exit physical retail. The move reflects a broader trend within the beauty industry, where established retailers are prioritizing online sales channels to adapt to changing consumer behaviors. The closure of Morphe's physical outlets is indicative of a shift in retail strategies, as brands seek more flexible, cost-effective ways to reach customers without the overhead of maintaining physical storefronts. The implications extend beyond cosmetics, affecting the retail industry at large as companies reevaluate their brick-and-mortar investments.

Party City
As the leading provider of party supplies across the nation, Party City offers a vast array of decorations, costumes, tableware, and party favors for every occasion. However, recent social and cultural shifts are impacting its sales. As consumers increasingly favor destination celebrations like outdoor events or large gatherings hosted outside the home, traditional party stores are experiencing a decline in foot traffic. Additionally, the COVID-19 pandemic further accelerated changes in social behaviors, prompting a reduction in in-person shopping for party items. Consequently, Party City has announced plans to close several stores in 2023, though its online retail presence will remain robust, providing customers with continued access to their products. The company aims to adapt by strengthening its e-commerce capabilities, catering to the growing preference for online shopping.

Kroger and Albertsons
The grocery sector is undergoing significant consolidation as industry giants Kroger and Albertsons are preparing to merge, creating one of the largest grocery chains in the US. This strategic move aims to enhance competitiveness against larger retailers like Walmart and Amazon. However, such mergers inevitably lead to store closures due to overlaps and operational restructuring. Already, several stores under the Safeway and Harris Teeter brands, owned by these companies, have announced closures or are in the process of shutting down locations in 2023. While specific store closures are yet to be fully disclosed, industry insiders expect more closures as the merged entity seeks to optimize its footprint. Consumers will need to adapt to a changing grocery landscape where the number of physical retail outlets may decrease, but online shopping options continue to expand.

Sears
Sears, once a retail powerhouse offering everything from appliances to clothing, has faced a long decline over the past decade. After filing for bankruptcy in 2018, the company has been rapidly closing stores across the country, with fewer than 20 locations expected to remain operational by the end of 2023. The decline has been attributed to shrinking market share, economic downturns, and the rise of online competitors. Sears’ remaining stores are often located in shopping malls or less competitive markets. Shoppers interested in visiting the last few Sears outlets should do so soon before they cease operations entirely, as the brand gradually phases out its physical presence. Despite the closures, Sears continues to operate online, attempting to retain customer loyalty through digital channels.

Signet Jewelers
Signet Jewelers, famed for its brands including Kay Jewelers, Jared, Zales, and Piercing Pagoda, is also undergoing store closures. The company recently announced that it would shutter several hundred stores across its brands to adapt to declining in-store jewelry sales and the rapid growth of online jewelry shopping. While some stores will remain open, the overall number of physical retail outlets will significantly decrease in 2023. The trend towards e-commerce in the jewelry sector is accelerating, driven by consumers’ preference for online shopping for convenience, better deals, and a wide selection. Signet's strategic closures aim to position its brands competitively in the evolving jewelry market, balancing physical retail presence with a strong digital footprint.

Macy’s
Macy’s, a historic staple in American retail, has been systematically closing underperforming stores since 2020. This process is nearing completion, with the retailer now focusing on a more streamlined presence in key malls and shopping districts. The company's strategy emphasizes the importance of a robust online platform, which has gained importance amid declining foot traffic in traditional department stores. Macy’s closures are part of a larger effort to reduce operational costs and adapt to new retail realities. Consumers should seize the opportunity to visit Macy’s remaining stores before they close, as these outlets are expected to be phased out gradually. Despite the physical store closures, Macy’s online store remains operational, providing customers with a seamless shopping experience across digital channels.