UBS analyst Michael Lasser predicts there will be 40,000-plus store closures over the next five years, although differentiated players — including those in footwear — could beat the trend.
“We expect digital to prevail as a priority for softlines companies but see stores still playing a big role in consumers’ shopping expereince,” Lasser said. “In our view, companies best positioned to navigate retail disruption includes with a strong DTC (direc-to-consumer) focus, such as Deckers, On Running and Ralph Lauren Corp.” He noted that these brands also have “high pricing power.”
Lasser said that increased store fulfillment options should improve the profitability of e-commerce transations for brands and specialty retailers, while provided the added benefit of potentially limiting the number of store closures.
In the sporting goods category, sales per store for the trailing 12 months (TTM) were at $2.34 million as of the third quarter of 2025. That figure represents a 1.1 percent decline from year-ago levels, and is not 8 percent below the category’s all time high as of the first quarter of 2022.
Over that period, Dick’s Sporting Goods‘ market share rose gradually, with sales representing 19 percent to 20 percent of the category between 2017 and 2022, before “rising to 21 percent in 2023, 23 percent in 2024, and 24 percent in 2025,” Lasser wrote in a report.
As of the third quarter of 2025, Dick’s TTM sales per store were at $15.7 million, up 0.6 percent year-over-year. As the category leader, Dick’s is well positioned to capture the share left behind by the exit of weaker competitors. (The data points for Dick’s refers to its core Dick’s stores, and doesn’t appear to include the Foot Locker operation that was acquired last year).
Academy Sports + Outdoors‘ penetration has remained “relatively stable” over the past five years at 10 percent to 11 percent. Lasser said Dick’s and Academy are “well positioned to continue to expand their market share.” Academy’s TTM sales per store reached $29.7 million, with a year-over-year decline of 7.1 percent.
While the sporting goods sector was a major beneficiary of the pandemic as more consumers shifted wallet share toward outdoor activities, the UBS analyst noted that those trends have started “to normalize.” As of the third quarter of 2025, sporting goods retailers generated $57.6 billion in TTM sales, just 7 percent below the all-time high, he said.
“We believe downside pressure on the category is limited, as sales have stabilized at elevated levels despite broader pressure on discretionary spending,” he said. “This resilience likely reflects sports and health activities becoming more embedded in consumers’ daily routines.”
Footwear is also sold in off-price retailers and in department stores, but the latter is a distribution channel where the footprint has decreased modestly in recent quarters. According to data supplied by Lasser, the TTM sales of department stores as of the third quarter of 2025, totaled nearly $39 billion and fell 4 percent versus year-ago levels. He said further store closures are expected, and could come from Macy’s and JC Penney. Saks and Neiman Marcus are in the process of closing a handful of stores during Saks Global’s Chapter 11 bankruptcy process.
“We believe continued market share losses — primarily against off-price retailers and brands’ own DTC channels — will keep department store sales under pressure,” Lasser said.
Shoes are also sold at mass merchandisers, such as Walmart, Target and Costco. Their average sales per square foot reached $1.04 billion, or a 5.2 percent CAGR (compound annual growth rate) over the past 10 years. The TTM sales per store at mass merchants were $12.44 million as of the third quarter of 2025.
Lasser said that shifting consumer behavior has contributed to the ongoing trend of consolidation as more retailers shut stores.
Online sales now account for 22 percent of total U.S. retail sales, up from 11 percent in 2019. He said the rise of agentic shopping — systems that use AI agents to autonomously find products based on user prompts — will result in higher rates of e-commerce adoption. Because AI agents are “less swayed by splashy marketing campaigns” and other factors such as childhood connections and nostalgia, Lasser said that retailers should “increasingly be distinguished by the attributes of speed, location, assortment, experience, and price.”
With the combination of e-commerce and AI-enabled shopping siphoning sales away from physical stores that, in turn, reduce the revenue needed to sustain large store fleets, even retailer with strong onien offerings are learning that they as meet demand with fewer physical locations, leveraging home delivery and curbside pickup. Moreover, shoppers now visit streos more purposefully and less frequently.
Should 40,000 stores close over the next five years, that would reduce the total number of retailer stores in the U.S. to 907,000 by 2030 from 947,000 doors at the end of the third quarter of 2025.
Of the various distribution channels in retail, Lasser said small chains and independent retailers face the highest risk. These small chains between 2010 and 2019 shuttered 40,000 locations. “Although this trend briefly reversed from 2019 to 2021 due to the pandemic, we view that period as an exception rather than a structural change” Lasser said.
