Retail is a tough business in 2025, and bankruptcies in the sector have picked up.
Well-known brands like Claire’s and Rite Aid have added to the growing list this year, and US bankruptcy filings surged past 2020 pandemic levels over the summer. Retail chains have been particularly at risk amid continued shifts to e-commerce, tariff-driven import cost increases, and a growing divide in the spending habits of high and low-income households.
For investors, UBS analysts said this week that the trend of higher retail bankruptcies stands to benefit a handful of stocks. Here are the names the bank is eyeing.
UBS thinks these retail stocks can rise as competitors dwindle
In a report this month, UBS analysts laid out the number of planned store closings specified by bankrupt retail chains. The list included Rite Aid closing 900 stores and Claire’s shuttering 300 as part of its Chapter 11 proceedings.
By UBS’ estimate, the number of stores closed in the US between 2024 and 2029 will reach 40,000.
Examining Rite Aid and Clair’s bankruptcies, analysts led by Michael Lasser laid out the stocks that they think are most likely to benefit from the store closing trend.
Walmart +15% YTD.
Dollar Tree +28% YTD.
Dollar General +41% YTD.
Costco +5% YTD.
Kruger +6.5% YTD.
They write that Walmart, Dollar Tree, and Dollar General are well-positioned to benefit from both chains closing stores, while Costco and Kroger stand to gain from Rite Aid’s struggles.
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Their analysis centered on the location of closed Rite Aid and Claire’s locations and the competitors with the closest overall proximity, which they expect to lead to an influx of new traffic.
“87% of DLTR locations were within a 10-min drive from Rite Aid locations, followed by DG at 67% and WMT at 58%,” the report said.
It added that 67% of Dollar Tree locations are located within a five-minute distance to a Claire’s. Walmart had the next highest location overlap, at 53%.
“From a proximity perspective, we believe DLTR, DG, and WMT are better positioned than others, given their higher Competitive Incidence scores within a 10-minute distance from Rite Aid stores,” Lasser stated.
While the loss of front-end sales from both Claire’s and Rite Aid is seen as a tailwind for discount retailers such as Dollar Tree and Dollar General, the analysts said that Dollar Tree is most likely to benefit from both companies closing stores from a proximity perspective.