Walmart 2023 Closings

[arizonaguy]

Walmart Academies are training centers for Walmart employees where they take classes to train on various subjects. Most of these academies have converted to Zoom classes making classroom teaching obsolete. I can see why this Academy closed. A Zoom class is cheaper and does not require traveling to another Walmart store for classes.

The Neighborhood Market stores are really awful for customers and for other Walmart stores. The 2 Neighborhood Market stores near the big Walmart store in Pleasanton, California have drained customers from the main Pleasanton store. The sales numbers have gone down so much that the store cannot meet sales goals.

So opening those 2 Neighborhood Market stores might have spelled doom for all three Walmart stores in the area. The customers spread out to shop at 3 stores making sales at each store mediocre causing the corporate office to deem them all as underperforming.

In order to make the other stores on the area look better with regard to sales figures, closing down stores will make the sales numbers increase at the remaining nearby Walmart stores.

It is all about making the sales figures go up for stores. If a store is doing poorly, it is necessary to kill it so that other stores have an improvement in sales.

Walmart clearly has an obsession with comp sales figures above all else. Yes, they're a key indicator of health but so is profit, transaction count, traffic, and so on. Again many examples in all of their divisions where a competing store opens or remodels, that might not even truly be a big success for the competitor but Walmart still closes the location due to a one time negative comp. I think they have become more accepting of competitive intrusion on the Sam's Club side as they focus more on membership revenue now vs just sales, but if a Walmart sign is out front and it either shrinks out or comps down for anything other than force majeure the plug gets pulled. Again they've made some rather dumb short-sighted closures on that Sam's Club side that I'm sure they're regretting today, but they seem to have a increasing willingness to retreat permanently from any challenge presented to a Walmart building.

This seems like a strategy that is going to eventually hurt them, especially as it seems like they're killing their once sizeable operation in the Chicagoland region.

They are overstored in some places so it would make more sense to thin the heard in places like Arizona, Texas, Florida where they have a store every couple of miles versus closing stores in places like Chicago and Portland where they'll never be able to re-open the stores or open in a different location (due to political factors) if the conditions change.

[ClownLoach]

Walmart Academies are training centers for Walmart employees where they take classes to train on various subjects. Most of these academies have converted to Zoom classes making classroom teaching obsolete. I can see why this Academy closed. A Zoom class is cheaper and does not require traveling to another Walmart store for classes.

The Neighborhood Market stores are really awful for customers and for other Walmart stores. The 2 Neighborhood Market stores near the big Walmart store in Pleasanton, California have drained customers from the main Pleasanton store. The sales numbers have gone down so much that the store cannot meet sales goals.

So opening those 2 Neighborhood Market stores might have spelled doom for all three Walmart stores in the area. The customers spread out to shop at 3 stores making sales at each store mediocre causing the corporate office to deem them all as underperforming.

In order to make the other stores on the area look better with regard to sales figures, closing down stores will make the sales numbers increase at the remaining nearby Walmart stores.

It is all about making the sales figures go up for stores. If a store is doing poorly, it is necessary to kill it so that other stores have an improvement in sales.

Walmart clearly has an obsession with comp sales figures above all else. Yes, they're a key indicator of health but so is profit, transaction count, traffic, and so on. Again many examples in all of their divisions where a competing store opens or remodels, that might not even truly be a big success for the competitor but Walmart still closes the location due to a one time negative comp. I think they have become more accepting of competitive intrusion on the Sam's Club side as they focus more on membership revenue now vs just sales, but if a Walmart sign is out front and it either shrinks out or comps down for anything other than force majeure the plug gets pulled. Again they've made some rather dumb short-sighted closures on that Sam's Club side that I'm sure they're regretting today, but they seem to have a increasing willingness to retreat permanently from any challenge presented to a Walmart building.

This seems like a strategy that is going to eventually hurt them, especially as it seems like they're killing their once sizeable operation in the Chicagoland region.

They are overstored in some places so it would make more sense to thin the heard in places like Arizona, Texas, Florida where they have a store every couple of miles versus closing stores in places like Chicago and Portland where they'll never be able to re-open the stores or open in a different location (due to political factors) if the conditions change.

What I don't understand is why throw away the costs that went into building that store just because of a few bad quarters? It's like selling your car to the auto wrecking yard because it has a flat tire. In a company with the size of Walmart, in an industry where so few competitive stores are opening, I can't imagine that the temporary sting of a comp drop in that rare situation where a Target opened across the street is worth taking such a loss. Lots of money coming in from the thousands of additional units that can absorb that sales drop. They're forfeiting the baseball game after the first out in the first inning when they do this. Again just the example of the two stores closed in Orange County, CA (A Walmart and a Sam's) where competitive intrusion impacted them - if those stores were still open they would have delivered comp sales increases every subsequent quarter after the anniversary of the competitor opening. Population increases from surrounding new homes would more than offset. They've given up more comp increase dollars than they ever lost. I don't think they are truly overstored even in places like Texas and Arizona; the only three good reasons I see for closing are obsolete facilities (including old stores without full grocery and no room to expand), high shrink locations, and deteriorating areas/shopping centers where everyone else has left. Walmart is #1 for a reason and as such they shouldn't immediately yield when threatened with a simple negative comp sales year. If a store is pushed to the brink financially by competitive activities then they would be better served to take a good, hard look in the mirror and ask why they're allowing David to slay Goliath.

[Bagels]

As much as I whine about Albertsons pricing, since the start of COVID, no other grocery chain has spiked prices higher than Walmart. In SoCal, there's at least three produce items we purchase weekly in which Albertsons is cheaper whereas Walmart averaged 30% less just a year ago (not for long... Albertsons will double the price tomorrow I'm sure). Just incredible, especially since produce quality is inferior at Walmart.

I'm not shocked the Neighborhood Markets are closing down. Touted as the "next big thing" less than 10 years ago, I wouldn't be shocked to see them completely close in the near future. The stores its currently renovating are generally larger, and feature more GM when it's time for grand reopening.

Groceries ain't Walmart's thing.

[buckguy]

Walmart clearly has an obsession with comp sales figures above all else. Yes, they're a key indicator of health but so is profit, transaction count, traffic, and so on. Again many examples in all of their divisions where a competing store opens or remodels, that might not even truly be a big success for the competitor but Walmart still closes the location due to a one time negative comp. I think they have become more accepting of competitive intrusion on the Sam's Club side as they focus more on membership revenue now vs just sales, but if a Walmart sign is out front and it either shrinks out or comps down for anything other than force majeure the plug gets pulled. Again they've made some rather dumb short-sighted closures on that Sam's Club side that I'm sure they're regretting today, but they seem to have a increasing willingness to retreat permanently from any challenge presented to a Walmart building.

This seems like a strategy that is going to eventually hurt them, especially as it seems like they're killing their once sizeable operation in the Chicagoland region.

They are overstored in some places so it would make more sense to thin the heard in places like Arizona, Texas, Florida where they have a store every couple of miles versus closing stores in places like Chicago and Portland where they'll never be able to re-open the stores or open in a different location (due to political factors) if the conditions change.

What I don't understand is why throw away the costs that went into building that store just because of a few bad quarters? It's like selling your car to the auto wrecking yard because it has a flat tire. In a company with the size of Walmart, in an industry where so few competitive stores are opening, I can't imagine that the temporary sting of a comp drop in that rare situation where a Target opened across the street is worth taking such a loss. Lots of money coming in from the thousands of additional units that can absorb that sales drop. They're forfeiting the baseball game after the first out in the first inning when they do this. Again just the example of the two stores closed in Orange County, CA (A Walmart and a Sam's) where competitive intrusion impacted them - if those stores were still open they would have delivered comp sales increases every subsequent quarter after the anniversary of the competitor opening. Population increases from surrounding new homes would more than offset. They've given up more comp increase dollars than they ever lost. I don't think they are truly overstored even in places like Texas and Arizona; the only three good reasons I see for closing are obsolete facilities (including old stores without full grocery and no room to expand), high shrink locations, and deteriorating areas/shopping centers where everyone else has left. Walmart is #1 for a reason and as such they shouldn't immediately yield when threatened with a simple negative comp sales year. If a store is pushed to the brink financially by competitive activities then they would be better served to take a good, hard look in the mirror and ask why they're allowing David to slay Goliath.

I shouldn't be surpised if they stick with just one metric and it's comp sales---it does a lot to explain why they've closed stores in classic big box retail corridors. Their model always has been to maximize volume, rather than focusing on higher markup items like Target does. The Target model requires much more sophicticated buying because of the risk of having the wrong style for the wrong season or not anticipating demand in other ways--that probably accounts for Target having a bad year. Walmart likes to keep things simple and rigid, which in, the long run, is probably why they are stagnating. They're slow to adapt to specific markets (part of their overseas failures) and the quest forvolume has meant taking on commodity items like higher end electronics that don't add to their profits.

Walmart's base has always been areas with limited competition. They're used to benefiting from KMart or whomever eventually going out of business, so that even fairly depressed rural areas can deliver sales growth. You're right in that the negative effects of competition often are temporary---sometimes competition creates more traffic into an area, sometimes the novelty of new competitior fades, and if a store is well managed, they figure out how to win people back. Even if sales never fully recover, the store may continue to be a good performer by other benchmarks. Walmart was late in entering some large metro areas, esp. where there were high costs for entry, so it may be easier for them to retreat at least somewhat from the Chicago area even if it is many times larger than the kind of small downstate Illinois market they can easily dominate.

I'd disagree that food is essential for Walmart's future. It was added to drive volume and if they cut back on service, raise prices, etc. I could see them cut back on food even further to lower operating costs---all that refrigeration and stock rotation can be expensive.

[wnetmacman]

I shouldn't be surpised if they stick with just one metric and it's comp sales

I believe you're all missing an important point that was sent down in a directive from the top man himself late last year.

Doug McMillan told CNBC that shoplifting was at an all-time high, and that if it did not slow down, the company would do what it took to slow it down, up to *and* including closing the stores where it is most active. Unfortunately, this will hit the inner cities first. The four stores being abruptly closed account for a large amount of shoplifting activity that the company cannot curtail.

It's not just one metric.

[veteran+]

Perhaps, but I never believe anything that comes out of corporate.!

It's the same ole story over and over again..................Unions and Theft!

It's never: our calculations were wrong, we made bad decisions, we are unabe to compete, we made mistakes, we did not allocate the appropriate payroll to run this type of store, we failed to invest in security, etc.

[ClownLoach]

Perhaps, but I never believe anything that comes out of corporate.!

It's the same ole story over and over again..................Unions and Theft!

It's never: our calculations were wrong, we made bad decisions, we are unabe to compete, we made mistakes, we did not allocate the appropriate payroll to run this type of store, we failed to invest in security, etc.

They prove themselves to be incompetent operators with these high shrink tactics where you have $1 Band-Aids in a glass case (really, in Temecula, CA of all places one of the lowest crime areas in California I saw Band-Aids locked up). They're installing lockup cages inside departments with makeshift corrals like cosmetics then moving other unrelated categories that are already in cases into the area like electric toothbrushes and certain health products, resulting in customers thinking that Walmart doesn't carry the categories anymore because they're now separated from their category. There are stores where they've locked up the entire line of socks and underwear in glass cases. They're really paging overhead "Available associate with keys to mens boxer shorts lockup cage please, available associate with keys to mens boxer shorts." They don't want to spend the payroll to secure the stores (at least Target is putting scary looking paramilitary type security guards with body armor and actual guns in their Portland stores). Obviously they aren't taking the hard-line tactics the company was established on with shoplifting where they used to push for criminal and CIVIL prosecution of everything down to a pocketed candy bar. These tactics are much cheaper than the lost sales and fixture expense from locking up the entire store. I know theft is a problem up and down the West Coast but there is a tipping point where any sane person knows they are inhibiting sales and profit. At the very least they could move to a Costco/Sam's Club model for problematic small pocketable items with empty boxes and a merchandise pickup window; I'm sure with today's technology they could probably expedite the process by generating a "pull ticket" when the empty box gets scanned at the register so the customer has next to zero wait time at the merchandise pickup desk. One minimum wage associate with a closet size space could save some of these stores hundreds of thousands of dollars with the true problem items secured. They also need to seriously look at entrance vs exit doors and traffic control, plus putting returns and exchanges outside through a separate door like Lowe's did when they first opened (some newer Home Depot buildings are doing this now with the return desk in the entrance vestibule including Anaheim Hills and Perris, CA). There are cheap solutions that won't make the entire store like shopping in a prison.

[ClownLoach]

Here we go again... The Sam's Club in Grapevine, TX that was destroyed by a tornado last year was being rebuilt, but today it is being reported that the store has been permanently closed as part of Sam's "growth strategy." Translation: all the surrounding stores have been running double digit comp sales increases, which would turn into double digit negative comps after the store reopened. They're probably satisfied with how the other local stores are doing now and decided to just forget about reopening. The employees apparently were all split up and sent to other surrounding clubs. My guess is that it will just become another e-commerce facility for them once rebuilt, that way they don't have to account for any changes in comp sales and basically allow that comp sales figure to benefit from this act of God. I'm going to go out and guess that the entire Walmart corporate bonus structure is predominantly based on comp sales increases, which in turn encourages the leadership to make boneheaded decisions that waste tens to hundreds of millions of dollars in efforts to get a larger annual check.

[buckguy]

I shouldn't be surpised if they stick with just one metric and it's comp sales

I believe you're all missing an important point that was sent down in a directive from the top man himself late last year.

Doug McMillan told CNBC that shoplifting was at an all-time high, and that if it did not slow down, the company would do what it took to slow it down, up to *and* including closing the stores where it is most active. Unfortunately, this will hit the inner cities first. The four stores being abruptly closed account for a large amount of shoplifting activity that the company cannot curtail.

It's not just one metric.

It's just one of a list of performance metrics that Clown Loach mentioned, apart from shrink and changes to local market area. That's what I meant and it's taken from his singling it out.

I tend not to believe most of what management says in its press releases, regardless. Chains have always blamed something outside their control when their business was imply not working. I'm sure shrinkage is a factor in some places. I also figure that I shouldn't always believe upper management in any business. That just comes from life experience.

[storewanderer]

They prove themselves to be incompetent operators with these high shrink tactics where you have $1 Band-Aids in a glass case (really, in Temecula, CA of all places one of the lowest crime areas in California I saw Band-Aids locked up). They're installing lockup cages inside departments with makeshift corrals like cosmetics then moving other unrelated categories that are already in cases into the area like electric toothbrushes and certain health products, resulting in customers thinking that Walmart doesn't carry the categories anymore because they're now separated from their category....

I recently needed some WD-40 at Wal Mart. They have most of that aisle in a big locked case. But the case just so happens to cut right where the WD-40 is. The small WD-40 was locked, and the larger sizes were not locked. The employee I asked for help told me to just get the larger one because it would take forever to get the keys. I was unhappy and he said let me see if auto has any keys. Auto had keys so he unlocked it and got me what I wanted, I asked if I had to pay auto, he said no, pay up front. What is the point? There is no point. And this is why many of the items in these locked cases STILL GET STOLEN.

The makeshift corrals are at a lot of retailers. Some consultant out there seems to have engaged a lot of retailers on these. These are very poorly done. I have been in Las Vegas and went into a Vons and a Smiths who have both done this. The Vons is the infamous Twain Vons so it is no surprise in that neighborhood. However the Smiths where I saw this was the store on North Rampart up at the base of Summerlin and that shocked me to see in that location. Both were exactly as you described- 4 aisles with a dedicated checkstand and random sets of items within the area. Other related items many aisles away. Just a jumbled up mess.