Bed Bath & Beyond Ditches Bad-For-Business California

Bed Bath & Beyond has announced that it will not open or operate any stores in California, a decision that reflects the company’s response to the state’s challenging business climate. The retail chain, which emerged from bankruptcy in 2023, plans to open 75 locations across the nation by 2026, but customers in California will only be able to shop online.

Executive Chairman Marcus Lemonis cited California’s overregulated and expensive environment as a primary reason for the decision. In a press release, he stated, “California has created one of the most overregulated, expensive, and risky environments for businesses in America. It’s a system that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers.”

Lemonis highlighted the state’s higher taxes, fees, and wages, which he argues are unsustainable for many businesses. He also criticized the regulatory landscape, stating that it stifles growth and burdens ordinary citizens and businesses alike.

The decision comes amid a broader trend of companies leaving California due to high operational costs. A report from the California Policy Center (CPC) noted that since 2020, over 500 companies, including major firms like Airbnb and Google, have reduced their operations or exited the state entirely. The CPC identified California as having the worst business climate in the nation, citing the highest sales and income tax rates, as well as significant corporate taxes.

In addition to financial burdens, Lemonis pointed to rising crime rates and theft as factors contributing to the deteriorating business environment. Retailers have increasingly faced challenges with shoplifting, leading to closures of stores in major cities. For example, Walgreens closed five stores in San Francisco in 2021, citing the rising costs associated with theft.

The situation has been exacerbated by recent legislative actions, including a decision to raise the minimum wage for fast-food workers from $16 to $20, which is expected to lead to job losses in the sector. Lynsi Snyder, owner of In-N-Out Burger, recently announced plans to relocate to Tennessee, citing difficulties in raising a family and conducting business in California.

Despite these challenges, California Governor Gavin Newsom’s administration has been criticized for its response. Newsom’s office dismissed Lemonis’ comments, suggesting that Bed Bath & Beyond’s struggles were a result of its own financial issues rather than the state’s business environment.

As California continues to grapple with economic challenges, the CPC’s report indicates that the state faces ballooning deficits and has been ranked as the worst state to do business for the tenth consecutive year. With many businesses leaving, the future of California’s economy remains uncertain, prompting calls for accountability from voters to address these issues.