Mountain West Commercial Real Estate (MWCRE), a Salt Lake City-based commercial real estate agency, has released a report looking at two retailers that announced the largest number of store closures in 2023, Bed Bath & Beyond and Tuesday Morning. Together, these two retailers accounted for more than a quarter of all U.S. store closures in 2023, significantly impacting the retail landscape in the Intermountain West.
“The retail sector continues to navigate a tumultuous landscape marked by inflation, bankruptcies, retail shrink, the rise of e-commerce and evolving consumer habits,” report authors said.
Store closures increased dramatically in 2023, with over 4,600 retailers shutting their doors — an 80 percent increase from the previous year. By May 2024, more than 30 retailers had announced closures, affecting over 3,200 locations. Despite the wave of closures, the Intermountain West region’s retail vacancy rate has reached a historic low of 3.8 percent., the report found. The demand for retail space continues to outpace supply, partly driven by a reluctance among developers to start new speculative projects amid a high-interest- rate environment. While some new construction persists, it remains insufficient to meet strong demand.
Key findings from the MWCRE report include:
- Store Closures: In 2023, Bed Bath & Beyond and Tuesday Morning closed over 110 stores in the Intermountain West, vacating more than 2.5 million square feet. Over 1.3 million square feet of this space remains vacant.
- Backfilled Spaces: The vacated spaces have been partially backfilled by various tenants, with general retail (31.9 percent) and apparel retailers (29.9 percent) occupying most of the space.
- Small Percentage of Total Vacancy: The still-vacant space from Bed Bath & Beyond and Tuesday Morning closures represents only 2.6 percent of total vacancy in the Intermountain West region.
The report also lists the top retailers with more than 50 closures in 2023 and 2024 in the U.S.
“Despite the closures and challenges, the retail market in the Intermountain West remains highly competitive,” said Saundra Fife, director of research for MWCRE. “The historically low vacancy rates and ongoing demand indicate a resilient market poised for recovery and growth.”
The full report can be found at https://www2.mtnwest.com/finalflyers/ClosingUpShop_1.pdf.