SOUTH DAKOTA - In South Dakota, retail survival is about distance. When a store closes here, you can't just go to the "other one" down the street—because the next one might be a two-hour drive away.
As 2026 begins, the retail map of the Mount Rushmore State is shrinking. While Sioux Falls continues to sprawl with new dining concepts, the traditional "shopping" infrastructure is crumbling. From the thinning corridors of the Rushmore Mall to the quiet disappearance of rural general stores, the options for South Dakotans are vanishing.
Here is the breakdown of the retail shakeup expected to hit South Dakota in 2026.
The Mall Struggle: Rushmore Mall (Rapid City)
The fight to keep "Uptown Rapid City" (Rushmore Mall) relevant has hit a new snag in 2026.
- The Closures: The mall is losing key teen-retail anchors. Filings confirm that both Claire's and Icing are closing their mall locations.
- The Reality: While these small footprint stores might seem minor, they are "canaries in the coal mine." When national chains exit the only regional mall within 100 miles, it signals that corporate confidence in the location is plummeting. It leaves the mall increasingly reliant on its remaining anchors as in-line vacancies grow.
The "Main Street" Heartbreak: Sioux Falls
Even the booming economy of Sioux Falls isn't immune to the retail correction.
- The Loss: The confirmed closure of JuLiana's Boutique La Femme is a blow to the downtown retail mix. After nearly a decade of dressing the city, its exit underscores the immense pressure on independent retailers facing rising rents and online competition.
- The Trend: Downtown Sioux Falls is shifting. It is becoming a place to eat and drink (with new spots like Over Easy opening in 2026), but less of a place to shop. The "boutique" era is giving way to the "experience" era.
The Rural Squeeze: Family Dollar
In South Dakota's vast rural stretches, the Family Dollar is often the general store, grocery store, and pharmacy rolled into one.
- The Hit: As the chain executes its massive closure plan, South Dakota towns are vulnerable. The contraction strategy has impacted locations in Beresford, Reliance, and Lemmon.
- The Consequence: For a rancher or a senior citizen in these towns, the loss of a dollar store means a 40-mile round trip to the nearest Walmart for basic cleaning supplies or canned goods. It is a quiet crisis that is hollowing out the convenience of small-town living.
The "Ghost Box" End Game: Downtown Rapid City
The retail history of Rapid City is being bulldozed.
- The Project: The massive, empty box that once housed Albertsons (and later Family Thrift) at the intersection of Omaha and Mt. Rushmore Road is finally being transformed.
- The Pivot: In 2026, this site is moving forward as a mixed-use development. It's a clear signal that the days of large-scale grocery or retail anchors existing in the downtown core are over. The site's future is housing and services, not shopping carts.
The Pharmacy Watch: Walgreens
While no massive list has been released for South Dakota, the national downsizing of Walgreens is being felt in the Sioux Empire.
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The Fear: As the chain reviews underperforming locations, older stores in saturated parts of Sioux Falls are at risk. With "pharmacy deserts" already a problem in North Sioux Falls, any contraction would force residents to rely on overburdened Hy-Vee or Lewis Drug counters.
If you live in the new suburbs of Sioux Falls, you have more options than ever. But for the rest of the state—the shoppers in Rapid City and the families in rural counties—the map is getting emptier. The "general store" is gone, and the mall is fading, leaving Amazon as the only reliable option for everything in between.
