Major retail chains that closed in 2021 due to dwindling profits, spike in thefts
Several retailers have started to shift to e-commerce in effort to boost profit
Several retailers have announced the closure of locations in various cities, citing a number of factors, from changing consumer attitudes and future health needs to issues with spikes in crime.
CVS Health announced in November that it planned to close around 9% of its nearly 10,000 locations, with further closures of 300 stores each year for the next three years. Rite Aid also said it would close 63 stores in order to reduce costs and boost profits.
CVS specifically noted that a shift to digital preferences by most customers motivated the company to reconsider its physical presence.
The New York Times reported that CVS will "remake" remaining locations to focus more explicitly on health as well, with some locations serving as primary care service hubs.
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"We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence," said CVS Health President and CEO Karen Lynch.
Macy’s also cited a shift to e-commerce as a major factor in closing physical locations, with the pandemic lockdown in 2020 showing many retailers the frailty of the brick-and-mortar model.
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|CVS||CVS HEALTH CORP.||69.99||+1.11||+1.61%|
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JCPenney and Neiman Marcus filed for bankruptcy last year after weeks of lockdowns starved the retailers.
But Walgreens in October said that it needed to close several locations – all in San Francisco – in response to shoplifting concerns. The retailer said it increased security measures at locations across the city to the tune of 46 times the average.
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Target also admitted that it would close a few locations in San Francisco over security concerns, according to ABC 7. That city has become a "shoplifter's paradise," according to the Wall Street Journal, after District Attorney Chesa Boudin effectively decriminalized theft below $950.
Nearly two dozen CEOs of prominent retailers, including Home Depot, Best Buy and CVS, in early December signed a letter to Congress urging action to address the "growing impact of organized retail crime on retail employees and communities."
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"Leading retailers are concerned about the growing impact organized retail crime is having on the communities we proudly serve," RILA wrote in the letter, highlighting support for the INFORM Consumers Act. "This important legislation will modernize our consumer protection laws to safeguard families and communities from the sale of illicit products and we urge its quick passage."
FOX Business' Kyle Morris contributed to this report.