11 Stores and Restaurants That Will Close in 2026

Multiple large U.S. retailers and restaurant chains have announced planned location closures in 2026, including Carter’s (150 planned, 100 closing by end-2026), Walgreens (1,200 closures as part of a multi-year plan), Wendy’s (roughly ~300 by end-2026), Jack in the Box (~200 with remaining closures in 2026), Red Robin (~70 over five years), Macy’s (150 targeted historically), Saks Off 5th (9 beginning January), Yankee Candle (~20), REI (3), Noodles & Company (20 in 2026), and Orvis (31 stores + 5 outlets by early 2026). Companies cite tariffs, declining sales/traffic, inflation-driven consumer weakness and online competition, indicating sector-wide pressure on sales, margins and regional real estate/labor needs that should be reflected in valuations for retail and casual-dining peers.

Analysis

Market structure: Physical closures (Macy’s ~150 planned, Red Robin ~70 over five years, Wendy’s ~300, Jack in the Box ~200, plus others) remove roughly 500–800 locations among these names in 2026, concentrating traffic to lower-cost, e‑commerce and discount operators. Winners: asset‑light franchisors, value retailers and logistics providers that pick up displaced demand; losers: mall landlords, company‑owned restaurant portfolios and import‑dependent apparel/outdoor brands (NWL, TDAY exposure to tariffs). Competitive dynamics favor chains that can reprice, close unprofitable units and shift to delivery/discount formats, increasing pricing power for surviving locations by an estimated 1–3% margin expansion if traffic stabilizes.

Risk assessment: Tail risks include tariff escalation (+>$50–100m incremental duties for exposed names), contagion to regional mall REITs and covenant breaches for leveraged operators causing 100–300 bps spread widening in HY retail bonds. Timeline: immediate (days) volatility around earnings/closure announcements, short term (weeks–months) as stores close and lease negotiations occur, long term (quarters) structural demand shift. Hidden dependencies: mix of franchised vs company‑owned closures materially alters cash flow (franchisees absorb closures); lease termination costs and inventory write‑downs can create one‑off earnings shocks.

Trade implications: Direct plays — short JACK (JACK) and modestly hedge NWL (NWL) via 3–6 month put spreads sized 1–3% portfolio; consider a small long in NDLS (NDLS) 6‑month calls or 1–2% equity if valuation compresses further, as closures are company‑owned cost saves. Pair trade — long NDLS vs short JACK to capture operational vs structural weakness; options — buy 3–6 month put spreads on JACK (5–20% strikes) and protective collars on NWL to limit downside. Rotate 20–40% of retail exposure from department store/casual dining into discount grocers/logistics over next 4–12 weeks.

Contrarian angles: Consensus overprices a purely negative outcome — over‑closure could create localized supply shortages, enabling survivors to raise prices and lift AUVs (average unit volumes) by 2–5% in select metros. Historical parallel: the 2016–2018 retail retrenchment produced outsized returns for nimble survivors; look for mispricings where balance sheets are healthy but sentiment is poor (NDLS‑style names). Key monitoring triggers that would flip positions include tariff rollback (positive), SSS recovery >+2% q/q for casual diners, or HY bond spread compression >100 bps.

Key Decisions for Investors

• Establish a 2–3% portfolio short position in JACK (JACK) via equity or a 3–6 month bear put spread (buy 5–10% OTM put, sell 20–25% OTM put) to capture downside from ~200 planned closures and weak unit economics; cap loss at 6% of portfolio on adverse move.
• Buy a protective 6‑month put spread on NWL (NWL) sized 1–2% (buy 10% OTM, sell 30% OTM) to hedge tariff exposure and potential earnings misses tied to Yankee Candle and other product lines.
• Open a 1–2% long position in NDLS (NDLS) or buy 6‑month ATM calls (covered size) as a mean‑reversion play — company‑owned closures reduce cash burn and price/mix improvements can support upside if traffic stabilizes; pair this long with the JACK short.
• Rotate 20–40% of discretionary retail exposure into discount grocery and e‑commerce logistics names over the next 4–12 weeks; reduce mall/department‑store and casual‑dining exposure by 30–50% by rebalancing into defensive staples.
• Set rule‑based triggers to adjust positions: widen shorts if tariffs add >$50m incremental duties or same‑store sales fall >3% q/q for two consecutive quarters; tighten/cover shorts if tariffs rollback or SSS recovers >+2% q/q.