These Virginia Retailers Struggling, May Close Locations In 2023

VIRGINIA — In 2020 and 2021, the coronavirus pandemic forced retailers to change everything about the way they do business. And even as Virginia recovers from shutdowns, shifts in consumer buying habits amid nagging inflation have hurt long-standing retail brick-and-mortar businesses.

As the threat of recession looms over Virginia, retail chains could face yet another difficult year with a whole new set of challenges. Months of inflation have caused operating costs at retail spaces to spike and have chipped away at the sales of mid-tier retailers, experts said.

Even for chains that survived the pandemic, a spate of closures could be on the horizon for both department stores and large retailers in 2023, UBS analysts predicted in mid-December of 2022.

"These trends are likely not good for department stores as both luxury companies, as well as off-price retailers, compete directly with department stores," UBS analysts Jay Sole, Mauricio Serna, Shoshana Pollack, and Tiffany Agard told Insider. "We expect department stores to close locations as challenges persist."

“[W]e believe department stores face many challenges ahead,” Sole said as reported by RetailDive.com. “We model very weak earnings outlooks for Nordstrom, Kohl’s and Macy’s and believe these challenges are not fully appreciated by the market.”

Here are the chains that analysts say might close entirely or close many of their stores in 2023.

1. Bed Bath & Beyond

Bed Bath & Beyond is set to close more than 150 stores across the nation as part of a plan to strengthen business at remaining stores. Two of those locations reported in September 2022 are the Leesburg location at 532 Fort Evans Road and the Christiansburg location at 135 Shoppers Way NW.

Bed Bath & Beyond has 2o remaining stores in Virginia. Locations in Northern Virginia include Bailey's Crossroads, Hybla Valley, Springfield, Woodbridge, Fairfax, Dulles, Leesburg, Falls Church, and Fredericksburg.

2. CVS

CVS announced in Nov. 2021 that it would shutter more than 900 locations over three years — 300 stores per year. The company said the closures would reestablish a "new retail footprint strategy aligned to evolving customer needs," Yahoo reported. In October 2022, CVS closed a Falls Church store, reports said.

3. Rite Aid

In the spring of 2022, the retail chain announced it would close 145 stores before the year's end.

The company cited unprofitability as the main reason to close so many stores. Officials said the closures were meant to "significantly reduce costs."

4. Kroger/Safeway/Harris Teeter

Grocery stores were hardly spared from the "retail apocalypse," which decimated the shopping industry from 2017 to 2020. Two of the nation's largest grocery chains — Kroger and Albertsons — announced a $25 billion merger in October. Kroger closed several stores in 2021 and 2022 and will continue shuttering locations in 2023.

Both retailers own grocery stores that are prevalent in D.C. and Virginia: Harris Teeter and Safeway. There are 37 Safeway stores in Virginia, plus 12 in D.C., and 55 Harris Teeter stores in Virginia, plus three in the District.

Company officials have not said which stores, would be affected by the pending merger.

"Closing a store is a difficult decision and one that we take very seriously," Lori Raya, president of Kroger's Mid-Atlantic Division, said in a statement after closing a store that opened in 1979, according to BestLife. "This store's low financial returns made it unfeasible to continue to operate while still upholding our low-price commitment to our customers."

5. Nordstrom

While it's unclear whether Nordstrom will completely fold in 2023, analysts predict that the retailer will be "under pressure" in the first half of 2023, Insider reported. The news website also reported that analysts predict a wave of department stores will close in 2023.

6. Macy's

The long-time retailer still operates a handful of stores in Northern Virginia, including: Fair Oaks Mall in Fairfax, Tysons Corner Center in McLean, Springfield Mall in Springfield, Ballston in Arlington, Manassas Mall in Manassas, Pentagon City in Arlington, Dulles Town Circle in Dulles, and Downtown Metro Center in Washington, D.C.

7. Best Buy

This struggling electronics retailer has been quietly closing more stores each year. The chain closed 20 locations in 2019 and 20 more in 2020, when the coronavirus pandemic forced mass closures of retailers across the nation.

In early 2021, the chain announced plans "to close a higher number this year." The company did not reveal the total number of its stores. Media reports suggest that at least 60 Best Buy stores closed in 2021.

Best Buy currently has 32 locations in Virginia. In a March, 2022 Star Tribune article, Best Buy executives said they expected business to continue to taper.

In a 2022 BizJournals.com article, Best Buy CEO Corie Barry predicted that supply chain issues, labor shortages and continued outbreaks of COVID-19 globally could lead to unexpected shutdowns of factories that could ripple through the markets, she said.

Correction: An earlier version of this article misattributed the statement made by Best Buy CEO Corie Barry.