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As department stores continue to shut down, dollar stores see a resurgence

AYESHA RASCOE, HOST:

Big changes may be coming to your local shopping center. Department stores are trying to reinvent themselves. Bed Bath & Beyond is teetering on the brink of bankruptcy, and dollar stores are going on a grand opening spree. NPR's Alina Selyukh is here to tell us more. Hey, Alina.

ALINA SELYUKH, BYLINE: Hello. Hello.

RASCOE: So let's start with the big picture. Are we seeing more stores closing or opening in the U.S.?

SELYUKH: Yeah, this may be a bit surprising to folks. For years, we heard brick-and-mortar is dying. That's definitely not true. In fact, last year, we saw the trend turn. Store openings actually outpaced store closures by almost 2 to 1. There are many reasons why. One of them is that people still say they like shopping in person. Coresight Research tracks the store data. And so far, they show the trend is continuing this year.

RASCOE: Wow. I mean, that really goes against, like, the conventional wisdom.

SELYUKH: Things we think we know.

RASCOE: Yes. So who's opening all these stores?

SELYUKH: Dollar stores. Hundreds and hundreds of dollar stores. We're talking Dollar General, Five Below, Family Dollar. They've been on a yearslong expansion. John Mercer, who heads up global research at Coresight, explained that this explosion of discount retail is driven by some really big societal themes. You've got an aging population with many health care expenses, lots of people on fixed income, younger people who have to be price conscious, a growing wealth disparity.

JOHN MERCER: You've got all these structural factors that are feeding into what we call the discount store decade.

SELYUKH: The discount store decade, meaning the 2020s is the renaissance of discount stores, not only dollar stores but also online sellers, off-price stores like T.J. Maxx and Burlington and even big-box stores like Walmart.

RASCOE: So that's good news for those discount stores. But I also want to ask you about Bed Bath & Beyond. We know that chain is on the brink of bankruptcy. Is it going to disappear this year?

SELYUKH: Well, bankruptcy doesn't necessarily mean a company completely disappears. What we know is that Bed Bath & Beyond is considering bankruptcy, but it's not there yet. This week, the company did report another quarter of losses, losing both shoppers and money. And it has expanded the list of stores it plans to close, which includes a few of buybuy BABY locations. Also, I want to note another thing about closures. Wanted to mention that we are seeing a bunch of closures from CVS, though that's part of a long-running plan to shift more to online sales. And Macy's is also closing four stores.

RASCOE: Speaking of Macy's, like, what's happening with department stores, you know, coming out of the lockdowns of the pandemic? Like, where do they stand?

SELYUKH: They did survive the pandemic, though some chains are sort of stuck in that loop of trying to get more shoppers in the door. Retail expert Katie Thomas, who leads the Kearney Consumer Institute, called these the mushy middle. They aren't luxury, which has actually continued to do well. They aren't selling unique things online. And they aren't a big-box store where people feel like they're getting an amazing bang for their buck.

KATIE THOMAS: That is where consumers' habits changed over the pandemic. And they just stopped going to certain places or feeling the need to go there uniquely.

SELYUKH: When I think of this, I think of actually Bed Bath & Beyond but also J.C. Penney, which is still around, Kohl's, Macy's. It's not affecting all department stores universally. But definitely a bit of an identity search that we will keep watching this year.

RASCOE: That's NPR's Alina Selyukh. Alina, thank you so much for joining us.

SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.

Ayesha Rascoe is a White House correspondent for NPR. She is currently covering her third presidential administration. Rascoe's White House coverage has included a number of high profile foreign trips, including President Trump's 2019 summit with North Korean leader Kim Jong Un in Hanoi, Vietnam, and President Obama's final NATO summit in Warsaw, Poland in 2016. As a part of the White House team, she's also a regular on the NPR Politics Podcast.
Alina Selyukh is a business correspondent at NPR, where she follows the path of the retail and tech industries, tracking how America's biggest companies are influencing the way we spend our time, money, and energy.