Rising Inflation Leads to Big Lots Store Closures and Financial Struggles

Discount retailer Big Lots is facing challenges as inflation impacts consumer spending in the United States. According to a recent U.S. Securities & Exchange Commission (SEC) filing, Big Lots plans to close ’35 to 40′ stores by the end of the year. The Ohio-based company, operating over 1,300 stores across 48 U.S. states, expressed concerns about its future due to a decrease in shopper expenditure amidst rising inflation.

Last month, Big Lots reported a significant net loss of $205 million for the first quarter of fiscal year 2024, which ended on May 4. Additionally, their net sales saw a decline of 10.2% compared to the same period in the previous year.

In a statement, Big Lots’ President and CEO, Bruce Thorn, acknowledged the challenges faced by the company, attributing them to the reduced spending by their core customer base, especially on higher-priced discretionary items. Thorn outlined the company’s strategic approach to navigate through these difficulties by focusing on areas within their control and aiming for improved sales and gross margin rates.

The retailer’s first-quarter earnings fell short of analyst expectations, with net sales totaling $1.009 billion, down from $1.124 billion in the previous year. Despite employing 35,000 associates and maintaining a mission to provide customers with discounts on a variety of products, Big Lots has been experiencing financial losses and cash flow concerns since 2022, leading to speculations about potential bankruptcy.

While Big Lots has plans to open three new stores this year, they are also set to close dozens of existing locations. The company has not yet disclosed the specific stores that will be affected by these closures.