Growth in U.S. retail store openings slowed significantly in fiscal year 2025, with net new locations expanding by a modest 0.7%, according to a new report from Telsey Advisory Group.
While the pace lagged behind both 2023 and 2024, analysts and industry observers see signs that store expansion could accelerate in 2026 as retailers adapt to evolving market dynamics and seize opportunities arising from industry shakeups.
A Year of Caution in Store Expansion
Retailers adopted a more cautious approach to physical expansion in 2025, refraining from aggressive new store builds amid broader economic uncertainty, elevated tariffs, and changing consumer behavior. Overall openings were constrained even as established players like Target and Walmart continued to grow their footprints through targeted expansions and remodels aimed at enhancing omnichannel capabilities and capturing greater share of wallet.
This slower pace contrasts with previous years of more robust store network growth, signaling that many retailers are prioritizing profitability and efficiency over sheer footprint expansion as they balance capital expenditures with digital transformation investments and shifting shopper expectations.
Projection of Growth in 2026
Looking ahead, the Telsey Advisory Group report projects net store openings will increase by approximately 1.4% in 2026, nearly double the expected rate in 2025. Growth is anticipated to be category‑specific, with beauty, off‑price, and discount retailers leading expansion plans as they capitalize on consumer demand for value and specialized experiences.
At the same time, luxury and department stores are forecast to see net closings, reflecting ongoing strategic retrenchment among some traditional brick‑and‑mortar heavyweights. This diverging landscape underscores how differing business models are being tested in the current retail cycle.
Retail Bankruptcy and Real Estate Opportunities
Bankruptcies among established retail brands in 2025 have also reshaped the store openings landscape. As legacy players like those entering bankruptcy vacate prime retail spaces, opportunities are emerging for competitors to acquire desirable locations at favorable terms. According to analysts, these vacancies create openings for off‑price and specialty retailers to enter new markets or strengthen their presence in existing ones.
This dynamic is playing out against broader retail real estate trends showing tight vacancy rates and resilient fundamentals at high‑performing centers, even as expansion remains selective and strategic.
Evolving Store Strategies in a Hybrid Retail Era
Although store openings slowed, many retailers continue to innovate their physical formats and experiences. Industry outlooks for 2026 emphasize hybrid approaches that blend digital and in‑store engagement, including experiential retail, localized formats, and enhanced service offerings that justify the in‑person visit.
Retailers are also integrating data, AI, and seamless fulfillment into store strategies to better serve consumers and drive omnichannel growth — a trend that supports the case for continued physical presence alongside digital channels.
Looking Ahead
The deceleration in retail store openings in 2025 reflects cautious investment amid shifting consumer habits and macroeconomic pressures.
However, with accelerated growth expected in 2026, particularly in value‑oriented and specialty segments, the retail landscape appears poised for a rebalance that favors strategic physical expansion tied to omnichannel engagement and curated customer experiences.
More about store openings/closings:
Nathan Sellars
Ashton York
Staff Report
