Discount retailer Big Lots will close 35 to 40 stores this year as it considers bankruptcy. It cites “elevated inflation” and decreases in consumer spending as reasons for the closures.
It marks the latest chain with a large footprint in California to file for bankruptcy. Others include Red Lobster, Rite Aid, and Bed Bath & Beyond.
“In 2024, the U.S. economy has continued to face macroeconomic challenges, including elevated inflation, which has adversely impacted the buying power of our customers,” a financial disclosure from Big Lots states.
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A spokesperson for Big Lots did not immediately respond to an email seeking comment and information on which stores may be closing. The potential bankruptcy was first reported by the New York Post.
Where are Big Lots in California?
California has 109 Big Lots stores, second only to Texas (116) in the nation. According to its website, the discount chain has locations all over California, including three in Fresno, the most in one city in the state.
What other discount stores are closing in California?
In April, 99 Cents Only Stores announced it was closing all of its 371 locations.
With its first store opening in Los Angeles in 1982, 99 Cents Only Stores spread across the West, with locations in California, Texas, Arizona and Nevada.
In June, Dollar Tree Inc. announced it bought the leases of 99 Cents Only around the western United States. Dollar Tree also acquired the North American Intellectual Property of 99 Cents Only Stores and selected on-site furniture, fixtures, and equipment as part of the purchase.
Big Lots is the latest among surge in bankruptcies
June saw the highest level of bankruptcies since the COVID-19 pandemic in early 2020, according to a report by the Wall Street firm S&P Global.
This year’s bankruptcies have totaled 346, “higher than any comparable figure in the prior 13 years,” S&P said.
“High interest rates, supply chain issues and slowing consumer spending continue to weigh on struggling companies,” the note states.
From March 2022 to July 2023, the Fed hiked its key interest rate from near zero to a range of 5.25% to 5% — a 23-year high — in an effort to tame a pandemic-induced inflation spike.
Recent reports underscore that inflation eased notably in May, with a key measure the Fed follows closely at 2.6%. That’s above the Fed’s 2% goal but the lowest since March 2021 and down from a peak of 5.6% in mid-2022.
But Jerome Powell, who chairs the Federal Reserve, has maintained a cautious stance about lowering rates since inflation unexpectedly picked up in the first quarter following a significant slowdown last year.