The trend: A tough macro environment is driving many retailers and restaurants to shutter physical locations as cost pressures and shifting consumer behavior squeeze profits.

• Newell Brands will close around 20 Yankee Candle stores in the US and Canada in January as part of broader cost-saving measures that include layoffs affecting roughly 10% of its global professional and clerical staff.
• Children’s clothing retailer Carter’s plans to close 150 stores over the next three years, including about 100 next year. The brand has also paused new openings under its current US store model and plans to reduce its product assortment by up to 30% in response to tariffs that are pressuring margins and raising costs.
• American Signature—which operates Value City Furniture and American Signature Furniture—will close 33 stores after parent company Schottenstein Stores Corp. filed for Chapter 11 bankruptcy relief, citing “one of the most severe housing market declines in recent history” as a key driver of falling sales.
• Wendy’s plans to close up to 300 US restaurants in the coming months amid declining revenues and profits, as its costs rise and lower-income consumers pull back.

A recent CoStar report expects store closures to remain elevated in the coming quarters, with net retail occupancy rising by an average of 3.8 million square feet per quarter in 2026, which would be well below the prior five-year average of 9.8 million.

The context: CoStar expects retail vacancy rates to continue rising through the first half of next year. That would mirror the first half of 2025, when roughly 6,000 stores closed, vacating 123.7 million square feet of space, per Coresight Research. But conditions stabilized in Q3 as bankruptcy-driven closures eased.

And with retail construction starts at multi-decade lows amid sharply rising costs, new supply of in-demand space remains scarce—helping support occupancy even in a challenging environment.

Our take: We expect physical retail sales to grow a healthy 2.8% next year, which should help sustain demand for space despite ongoing closures.