Tuesday Morning, the beleaguered discount home goods retailer, will shutter more than half of its stores nationwide after filing for Chapter 11 bankruptcy protection on Feb. 14.

The Dallas-based company confirmed that it will shutter 263 stores that are situated mainly in “low-traffic regions.” Tuesday Morning operates 487 stores with approximately 1,600 full-time and 4,700 part-time employees.

“The company believes this targeted approach to winding down unprofitable and underperforming stores will position Tuesday Morning to emerge from bankruptcy with a profitable, cash-generating store fleet that serves its most engaged and loyal customers,” Tuesday Morning said in a statement.

In May 2020, Tuesday Morning filed for Chapter 11 and closed roughly 200 stores amid the coronavirus pandemic.

Is this the beginning of a broader shakeup trend in the U.S. retail sector, or is the industry trimming the fat to survive a slowing national economy?

In the early days of 2023, about a dozen major retailers announced plans to shut down hundreds of stores nationwide in the coming months.

Bed Bath & Beyond is at the top of the list, with plans (pdf) to close 416 locations in Arizona, California, Florida, Illinois, New York, and other states. This will also include its sister buybuy BABY outlets. The company aims to finish the year with fewer than 500 U.S. stores across both brands.

The struggling retailer is also ending its insolvent Canadian operations. Bed Bath & Beyond operates 54 locations and 11 buybuy BABY stores north of the border.

“We are optimizing our store fleet and supply chain and continuing to invest in our omni-always capabilities,” said Sue Gove, President and CEO of Bed Bath & Beyond Inc., in a statement. “This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us.”

Apparel retailer Gap revealed in 2020 that it would close about 350 Gap and Banana Republic stores by the end of 2023, representing roughly one-third of its total store numbers.

By the year’s end, the retailer wants to accomplish its goal of having a “smaller and healthier fleet of stores.”

Party City, which filed for Chapter 11 bankruptcy in January, plans to close around 22 underperforming stores, according to court documents filed on Feb. 16 (pdf). Real Estate Partners will auction off 12 locations, and the remaining 10 will shutter later this month.

It also requested the court to release it from 28 store leases in 13 states. The retailer noted that these outlets were performing so poorly that it shut down and vacated those premises before filing for bankruptcy.

“Our work on our lease portfolio is moving very quickly, with a plan for us to exit locations that do not meet the key financial metrics required for our go-forward fleet,” said Marc Ehle, Party City’s executive vice president of enterprise operations, in a statement.

Party City, which sells balloons, costumes, decorations, and other celebration items, has cited a considerable drop in consumer spending for its lackluster performance.

Walmart in recent years has begun closing several underperforming stores in various states every year.

In 2023, the big-box retailer is closing five stores in four states and winding down its nine-year experiment with two pick-up-only locations in Arkansas and Illinois, the retail juggernaut confirmed to KRQE in Albuquerque, New Mexico.

Speaking in an interview with CNBC in December, Walmart CEO Doug McMillon warned that the company could consider store closures and price hikes amid a wave of shoplifting.

“If that’s not corrected over time, prices will be higher, and/or stores will close,” McMillon said.

And Macy’s, as part of overall efforts to close 125 underperforming stores over three years, will be closing four stores in 2023: California, Colorado, Hawaii, and Maryland.

“The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile, and better fit to compete in today’s retail environment,” said Jeff Gennette, chairman and CEO of Macy’s.

In addition to the widespread store closures, the retail sector is also reducing payrolls. Last month, retailers announced the second-most job cuts of 13,000, according to the latest Challenger data.

Neiman Marcus Group was the latest retailer to announce plans last week to terminate 5 percent of its workforce, or about 500 employees.

The RealReal, a digital and brick-and-mortar luxury consignment store, cut 7 percent of its staff, totaling 230 workers, according to a Securities and Exchange Commission (SEC) filing. It is also shuttering four stores and two consignment offices.

Will 2023 repeat the significant number of 9,000 store closures in 2019? It may depend on the plethora of challenges presently facing the industry, from price inflation to sustainability.

The present environment might not be the retail apocalypse that many have prognosticated dating back to before the COVID-19 pandemic. Last year, store openings outpaced closures, Coresight Research reported.

A climate of rising interest rates and a slowing economic landscape is more likely to weigh on retailers that had already been facing unsustainable debt and declining sales, says Ben Johnston, the COO of small- and medium-size business lender Kapitus.

At the same time, retail stores in highly trafficked areas are expected to perform well this year if unemployment remains low and consumer spending holds steady, according to Johnston.

“This is especially true for retailers that serve the every-day or immediate needs of customers, such as coffee shops, bakeries, and drugstores. Many big-box retailers will continue to struggle as online competitors leverage supply chain efficiencies and a more diverse selection to attract customers, while declining home sales will mute a key driver of retail purchases,” he told The Epoch Times.

“While the economy is unlikely to bail out struggling retailers this year, we do not expect a dramatically worse environment than we saw in 2022.”

In recent years, industry experts have also sounded the alarm about retail square feet per capita in the United States (56 sq. ft. per capita) typically being more extensive than in Europe or Japan. Essentially, this trend produced an overstore problem nationwide, and many retailers are bearing the brunt.

However, according to a 2021 U.S. Real Estate Market Outlook report from CBRE Investment Management, this figure will decrease by 20 percent by 2025.

For stores that remain open, it is about adapting to the new generation of shoppers, says Jeanel Alvarado, a retail expert and CEO of RetailBoss.

“We can expect to see these retailers carry out new strategic plans when it comes to retail expansion, either in completely new geographical locations or opening new store concepts in the same regions,” Alvarado told The Epoch Times.

“It’s all about adapting to the new consumer and how they like to shop. For the retailers who’s stores remain open, they are remodeling, and redesigning the store layouts to better cater and attract the Gen Z and Millennial shoppers who will continue to grow in their discretionary spending.”

But consumers’ financial health may play a role in the immediate future of retail, be it online establishments or brick-and-mortar stores.

Retail sales surged at a better-than-expected pace of 3 percent in January, with department stores posting a 17.5 percent gain in sales. But experts note that this could have been driven mainly by price inflation (shoppers paying more for less) and rampant credit card usage.

The consumer price index (CPI) rose 0.5 percent month-over-month in January.

The Federal Reserve Bank of New York (FRBNY) reported that consumer debt soared to an all-time high of $16.9 trillion in the fourth quarter of last year, as credit card debt rose $61 billion to $986 billion.

“Even though it represents only 6 percent of total debt, credit card debt is the most dangerous because the interest rates are much higher than what most loans charge, and they’re only getting higher with each Fed rate hike,” said Jill Gonzalez, a WalletHub analyst, in a report.

The average credit card interest rate is around 23 percent.