Walmart has already closed nearly a dozen locations this year alone, and the trend seems to be continuing into 2024. One of the more confounding facts about retail—particularly the brick-and-mortar segment of the industry—is that store closures can actually be a good thing. At least for investors.
Shutting down underperforming locations helps shore up profits, resolve issues, or discontinue misguided ventures. This can be a very healthy indication that management is paying attention and knows when to simply throw in the towel.
Affected Retailers: Not Just Budget Shops
Interestingly, even upscale shops are not immune to these economic pressures. For instance, the popular bakery Foxtrot, known for its presence in cities like Washington, D.C., and Chicago, has completely closed its doors. The once-favored spot for a $35 grab-and-go lunch has lost its appeal among consumers. The deli, which saw a boom during the pandemic due to its convenience, abruptly shut down all locations this spring.
Walmart: Store Closures in 2024
The retail sector is undergoing significant changes. Stores that manage to stay open are facing other hurdles. Notably, drugstores in high foot traffic areas are increasingly resorting to locking up merchandise behind closed plexiglass doors to prevent theft.
As the retail environment continues to evolve, businesses must adapt to survive. Whether it’s budget retailers or high-end shops, the challenges are evident, and the solutions are not always straightforward.
In recent times, a visit to CVS reveals a surprising sight: even the simplest items, like toilet paper, are no longer displayed on shelves. Instead, customers must ring a bell to request assistance in retrieving their preferred brand, based on a selection of framed photos showcasing available options.
Retail Theft Crisis
This trend isn’t confined to pharmacies like CVS and Walgreens. A vast array of retailers, from convenience stores to big box retailers and even sporting goods stores, have reported a significant rise in theft, which is severely impacting their profit margins.
It appears that no retailer is immune to the challenges of 2024, whether they are small, upscale, or budget-friendly. Among them, Walmart (WMT) is no exception. This retail giant has already closed 11 stores across the United States in 2024, citing a variety of issues, including underperformance. Furthermore, Walmart has made the tough decision to shutter its 51 health clinic locations and discontinue its entire health division.
The Impact on the Retail Landscape
The ongoing challenges faced by retailers like Walmart and CVS highlight a broader issue within the retail industry. Here are some key points to consider:
- Increased Theft: The rise in theft is forcing retailers to rethink their security measures and customer service approaches.
- Profit Margins: With theft on the rise, profit margins are being squeezed, leading to difficult decisions such as store closures.
- Customer Experience: Changes like requiring assistance to retrieve basic items can impact the overall customer experience, potentially driving shoppers away.
As we move further into 2024, it remains to be seen how these challenges will shape the future of retail. Will these measures be enough to combat the rising tide of theft, or will we see even more significant changes in the retail landscape?
Walmart has announced the closure of additional locations in Georgia and Colorado, citing an unsustainable business model as the primary reason.
Impacted Locations and Employee Layoffs
According to layoff notices distributed in the two states, a total of 528 employees are set to be laid off in June. This includes:
- 141 employees from the Walmart in the Arapahoe/Douglas area, Colorado
- 92 employees from the Walmart in Marietta, Georgia
- 295 employees from the Walmart in Dunwoody, Georgia
Walmart’s Response
While Walmart has not provided additional comments on this matter, the retailer has previously expressed gratitude to customers in affected areas during past closures. A spokesperson emphasized their commitment to continue serving these communities.
Continuing Customer Service
“We look forward to continuing to serve them at any of our many locations across the area, on Walmart.com, and through delivery to their home or business,” a spokesperson had stated during earlier closures.
Even amid these challenging times, Walmart remains dedicated to providing quality service and convenience to its valued customers.