Retailers like Claire's and Rite Aid are closing stores. The biggest discounters will benefit, analysts say.

By Bill Peters

UBS says tariffs are likely 'making it more challenging for weaker, less relevant players to operate smoothly' in the wake of bankruptcy announcements

UBS analysts estimate that the 10 major retailers that have announced bankruptcies since last year could leave as much as $35 billion in sales up for grabs.

In the wake of bankruptcy filings, retailers like Claire's, At Home and Rite Aid are closing hundreds of stores - and large discount chains like Walmart Inc. and Dollar Tree Inc. will likely fill in the empty space, according to UBS analysts.

That expansion, were it to happen, would widen the divide between a handful of massive retailers - who are big enough to insulate consumers from steeper price increases caused by supply disruptions and tariffs - and everyone else.

"It's likely that the recent increases in tariffs and the rapidly changing rules around tariffs and other policies are making it more challenging for weaker, less relevant players to operate smoothly," UBS analysts led by Michael Lasser said in a note dated Wednesday.

In total, the analysts estimate that the 10 major retailers that have announced bankruptcies since last year could leave as much as $35 billion in sales up for grabs. And they found that for many of those struggling chains, rivals were often positioned nearby.

For instance, they found that 87% of Dollar Tree (DLTR) stores, 67% of Dollar General Corp. (DG) stores and 58% of Walmart (WMT) stores were within a 10-minute drive from Rite Aid stores. The analysts also said that Rite Aid's losses could translate into gains for big-box retailers and grocers that run their own pharmacies, including Walmart, Costco Wholesale Corp. (COST) and Kroger Co. (KR)

Elsewhere, Dollar Tree had around two-thirds of its stores positioned within five minutes from any Claire's location, the analysts found. Lots of Walmart, Target Corp. (TGT) and Five Below Inc. (FIVE) stores were also close by. The UBS analysts also said bankruptcy filings from Claire's, Party City, Big Lots, Joann and At Home could "provide market-share opportunities" for Target, Five Below and Dollar Tree.

Earlier this year, the analysts estimated that more than 40,000 stores will close in the U.S. between 2024 and 2029, as online shopping continues to reshape the retail backdrop.

-Bill Peters

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09-18-25 1305ET