UBS Predicts 45,000 Retail Store Closures Over Next Five Years as E-commerce Accelerates

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4.26.2026

Quick Facts

UBS analysts predict 45,000 U.S. retail stores will close over the next five years as e-commerce reaches 28% of total sales
Retailers announced over 7,100 store closures through November 2024, a 69% jump from the previous year
Large retailers like Walmart and Target expected to benefit while smaller chains face elimination

Growth in e-commerce, aided by artificial intelligence, will drive retailers to close more than 40,000 stores over the next five years, UBS analysts led by Michael Lasser said in a research note released Thursday.

The projection would reduce total U.S. retail stores to 913,500 from 958,533 currently. Online sales now account for more than 20% of total U.S. retail sales, up from just over 10% in 2019. UBS expects e-commerce to reach 28% by 2028.

“While the sector is closer to equilibrium today than it was several years ago, it has not yet reached stasis,” the UBS analysts said. “This trend should reward the larger, better positioned retailers and penalize the smaller, marginal retailers.”

U.S. retailers have already announced more than 7,100 store closures through November 2024, representing a 69% increase from the same period last year, according to research firm CoreSight. The firm expects closures to escalate to approximately 15,000 in 2025.

Clothing and accessories stores will lead the closures with 17,000 locations shutting down, followed by consumer electronics, sporting goods, and home furnishing stores, according to UBS data.

Major chains continue to shrink their footprints. Party City filed for bankruptcy in late 2024 and closed all 738 locations. American Freight shuttered all 328 stores after parent company Franchise Group filed for bankruptcy. American Signature announced closure of all remaining locations in January after finding no buyers.

“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a toll on brick-and-mortar retailers in 2024,” said CoreSight Research CEO Deborah Weinswig.

The consolidation will benefit large retailers with resources to adapt. UBS described it as “survival of the fittest” favoring Walmart, Target, Costco, and Home Depot over smaller chains lacking capital for technology investments.

Despite the closures, physical stores remain crucial for fulfillment and distribution. Lasser estimates 25% of online sales will be fulfilled by stores by 2028, versus 15% currently.

The retail job cuts have exceeded 60,000 in 2024, approaching 2009 recession levels, according to outplacement firm Challenger, Gray & Christmas.