The economic landscape in America is undergoing a seismic shift as businesses across various sectors face insurmountable challenges. The surge in inflation and escalating costs are pushing more companies into bankruptcy and forcing thousands of retail stores to shutter their doors. This troubling trend underscores the dire state of the economy, a top concern for voters as revealed by a recent Center Square Voters’ Voice Poll.
According to an analysis from CoreSight Research, nearly 3,200 retail stores are closing this year, marking a 24% increase from 2023. The closures span a wide array of sectors, with U.S. drugstores and pharmacies alone accounting for 8 million square feet of shuttered retail space. A significant factor driving these closures is retail theft, which has exacerbated the issue of “retail shrink,” closely linked to organized retail crime.
EYM Group, a prominent franchisee, has been hit hard, with 142 Pizza Hut locations in Illinois, Indiana, Georgia, South Carolina, and Wisconsin at risk of closure. The conflict erupted when Pizza Hut accused EYM Group of defaulting on millions of dollars in payments due by June. As the legal battle rages, 15 locations in Northwest Indiana have already been closed, causing significant disruption for employees and customers alike.
Adding to the grim picture, Tupperware has announced the permanent closure of its last operating production plant in the U.S., located in Hemingway, South Carolina. This move will result in the layoff of all 148 workers, with the first wave of layoffs beginning in September. Tupperware, an iconic brand synonymous with household storage solutions, plans to continue its production in Lerma, Mexico.
Similarly, the teen apparel retail chain Rue21 has filed for bankruptcy, announcing the closure of all 540 of its stores. Burdened by $200 million in debt, the Pittsburgh-based retailer is laying off all of its 4,900 employees, citing underperforming retail locations and the broader economic headwinds of inflation and rising costs.
The California-based discount retailer 99 Cents Only has also filed for bankruptcy, planning to close all 371 of its stores. The company cited significant and lasting challenges in the retail environment over the past several years as the primary reason for its financial woes.
Other notable closures include CVS Health, 7-Eleven, Rite Aid, Express, Walgreens Boots Alliance, Macy’s, The Body Shop, Burlington stores, Foot Locker, Carter’s, Dollar General, Abercrombie & Fitch, and Best Buy. These closures reflect a broader trend of financial instability and the relentless pressure of inflation on businesses.
The economic downturn isn’t confined to retail. Inflation has also hit the car insurance market, causing rates to surge 26% nationwide in one year. Potential home buyers are similarly affected, needing 80% more income in 2024 to purchase a home compared to 2020.
Consumers are feeling the pinch at the grocery store as well. The Wall Street Journal reports that it’s been 30 years since food costs have consumed such a large portion of household incomes. High transportation, fuel, ingredient, and labor costs have forced food manufacturers, grocery stores, and restaurants to keep prices high, often resorting to “shrinkflation”—higher prices for smaller portions.
Earlier this year, Bob Nardelli, former CEO of Home Depot and Chrysler, warned that more layoffs are imminent due to high-interest rates “killing” middle and lower-market companies. Economist David Rosenberg echoed these concerns, highlighting that total credit card debt has reached an all-time high of $1.13 trillion, with rising delinquencies on credit card and auto loan payments.
The Center Square Voters’ Voice Poll indicates that inflation and the economy are top concerns for voters, transcending political affiliations. David Byler of Noble Predictive Insights noted, “Every political group thinks this matters,” underscoring the widespread anxiety over economic instability.
As businesses struggle and consumers grapple with rising costs, the economic challenges facing America are clear. The path to recovery will require addressing these fundamental issues to restore stability and growth.
