California, September 13, 2025
News Summary
Bed Bath & Beyond’s decision to exclude California from its brick-and-mortar expansion reflects a broader trend of companies relocating out of the state due to high regulations and operational costs. The chain plans to focus on new states, citing California’s tax burdens and business climate as major deterrents. This trend has seen numerous businesses, including major firms, choosing to move to friendlier environments like Texas and Florida, driven by the quest for lower costs and better quality of life.
California – On August 20, Bed Bath & Beyond announced that its planned return to brick-and-mortar retail will not include any locations in California. This decision has spotlighted the ongoing trend of businesses relocating from the state, driven primarily by increasing regulations and costs that many companies find prohibitive.
Bed Bath & Beyond’s Executive Chairman, Marcus Lemonis, has publicly criticized the business climate in California, claiming it poses excessive risks. He has highlighted the burdensome tax structure, elevated fees, high wages, and stringent regulations as major hurdles to business expansion in the state. The chain, which filed for bankruptcy in early 2023, has since rebranded itself as Bed Bath & Beyond Home and is now venturing into new states with the opening of a store in Tennessee and plans for approximately 80 additional locations nationwide next year.
This corporate exodus from California isn’t unique to Bed Bath & Beyond. Many businesses, including Realtor.com, have chosen to move their headquarters to states perceived as more business-friendly. Realtor.com shifted its base to Texas in February, looking to escape the burdens of California’s expensive operational environment. A growing body of evidence, including a report by the Public Policy Institute of California, reveals that companies are increasingly influenced by high operating costs, taxes, available skilled labor, and hiring expenses when choosing their locations.
In a striking trend, from 2011 to 2021, 789 companies relocated their headquarters out of California, with a marked increase in such moves beginning in 2017. During the same period, the number of new firms moving into California plummeted from 137 in 2011 to just 68 in 2021. The Chief Executive of The Peebles Corporation has noted the deteriorating business landscape, suggesting that many are “fleeing” the state in search of better quality of life.
Data released by the Census Bureau found that a staggering 690,127 residents left California in 2023, following a notable outflow of 817,669 the previous year. Texas emerged as the most favored destination, attracting 93,970 former Californians, followed by Arizona with 54,222 and Florida with 39,052 relocations. The quest for lower taxes and a more manageable cost of living are central reasons for this migration, as states like Texas and Florida do not impose income tax.
As of now, median home prices in California are around $859,700, nearly double the national average of $440,892. For a household to afford a typical home in California, an annual income of $213,447 is required, as indicated by a Bankrate study. Relocations have included major firms such as Chevron, which moved to Houston in 2024, and Tesla, which left for Austin in 2021. Notably, both companies cited California’s high operational costs and regulatory constraints as primary reasons for their decisions.
A notable uptick in corporate relocations was recorded, with over 200 firms announcing their moves in 2021 alone, further underscoring the perception of California as an increasingly unfavorable business environment. Smaller businesses, too, are feeling the strain of high costs and regulatory demands, prompting them to seek greener pastures across state lines.
While California’s economy remains robust, valued at approximately $3 trillion (or $4 trillion), and still attracts some businesses that find ways to work within its constraints, the repercussions of this trend could have significant implications for its economic landscape. The outflow of businesses and residents signifies an evolving dynamic that reflects broader shifts in priorities and conditions, reshaping the competitive landscape for corporate America.
FAQ
Why did Bed Bath & Beyond decide not to open stores in California?
Bed Bath & Beyond cited California’s heavy regulations and high costs as significant factors, deeming the state too risky for business operations.
What is the trend of businesses relocating from California?
Between 2011 and 2021, 789 companies have moved their headquarters out of California, with many seeking states that provide a more favorable business climate.
Which states are popular destinations for those leaving California?
Texas, Arizona, and Florida are frequently cited as the most popular states for Californians relocating, particularly due to their lack of state income tax and lower cost of living.
What are some of the key reasons businesses are leaving California?
High taxes, steep housing costs, stringent regulations, and a challenging operational environment are common reasons cited by companies exiting the state.
How has the cost of living in California impacted relocations?
The high cost of living, particularly high housing prices, has pushed both residents and businesses to consider relocating to more affordable areas.
Chart: Businesses Moving Out of California
| Year | Companies Relocated | Residences Left California |
|---|---|---|
| 2011 | 79 | N/A |
| 2017 | Accelerating trend began | N/A |
| 2021 | 789 | N/A |
| 2022 | N/A | 817,669 |
| 2023 | N/A | 690,127 |
Deeper Dive: News & Info About This Topic
- State Affairs: Businesses Leaving California
- MoneyWise: Growing Exodus from California
- Tech Times: Companies Leaving California
- CoStar: Playboy Joins California Corporate Exodus
- Rolling Out: Successful Businesses Leave California
- Wikipedia: California
- Google Search: California Business Exodus
- Google Scholar: Business Relocation California
- Encyclopedia Britannica: California
- Google News: California Companies Moving
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
