Retail is dependent on consumer spending. As more stores close the remainder should be more profitable, which should minimize ripple effects.
Large retail chains are often anchor stores that sustain retail centers. When they shut down the economy of the retail center collapses. This impact spreads beyond the retail centers to surrounding businesses. The reduced retail traffic means that fewer people are stopping for lunch at restaurants, fueling up at gas stations, picking up prescriptions at Pharmacies, dropping off dry cleaning, etc. As a result these businesses are forced to cut back on staffing and possibly reduce hours. This causes further declines in business as the quality of service decreases. Eventually many of these business are forced to go under.
The abandoned retail centers also impact property values in surrounding areas and result in increased crime rates.
This process isn't immediate and the works displaced do not immediately find new employment. Thus you have a period where these workers are either without jobs or facing ever reducing hours which results in less disposable income.
In large urban centers you might have a dozen or more retail centers to chose from within a short distance from your home but in rural ares you're lucky if you have more than one.
In a lot of rural America you'll find many communities surrounding a Walmart often on the outskirts of a dried up husk of a town. In the 80s and 90s Walmart built supercenters just outside of the jurisdiction of small towns. The retailers in these towns couldn't compete on price and eventually folded. The small shops that didn't directly compete with Walmart (e.g. nail salons, shoe repair) eventually would end up leasing space inside the Walmart.