Walmart 2023 Closings

Predicting the demise of Sears & Kmart since 2017!
storewanderer
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Re: Walmart 2023 Closings

Post by storewanderer »

mjhale wrote: March 28th, 2023, 8:47 am

I've wondered what Walmart will do going forward with non-Supercenter locations that do not have a significant amount of grocery items. This could either be due to the size of the store or lease restrictions on the location. If Walmart isn't making much outside of grocery I would imagine they will start to have profitability issues with these types of stores especially if shrink becomes an issue. Maybe the exceptions are stores in rural areas where Walmart is the only one around. Even so we are seeing that grocery isn't the magic to success either with the Supercenters that are on closing lists. They have to pull a lot of volume to make a low profit item like grocery successful. If Walmart has a 125,000 square foot non-Supercenter could they convert the store in existing space where possible to at least try to drive more volume to the store. Or maybe that isn't even a profit move if the store just isn;t doing anything in the first place.
The thing is the Supercenter stores Wal Mart closes tend to be high volume stores. Everyone is shocked by the closures in most cases when a Supercenter closes.

Once in a while you get a closure that is an obvious older and low volume store in a declining area (like the current IL closure but that isn't a Supercenter) but those stores are more victims of a declining population base and not being in retail heavy/high traffic areas. I do think most Division 1 Store closures are a result of low volume and declining locations.

Neighborhood Market closures are obviously a result of low volume because Neighborhood Markets are not high volume stores typically. I am actually surprised we do not see more closures of those. They must have expenses down so low in those stores that they can break even.

The most recent closure that surprises me is the closure in South Bend. This store just looks like it got creamed by Meijer so it is closing. This closure strikes me as a sign of weakness. But it isn't that simple- the roads connecting around the store don't look great, so maybe that is to blame, but I don't know. I really think they lost the Meijer battle.
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Re: Walmart 2023 Closings

Post by mjhale »

storewanderer wrote: March 29th, 2023, 12:16 am The thing is the Supercenter stores Wal Mart closes tend to be high volume stores. Everyone is shocked by the closures in most cases when a Supercenter closes.
Is Walmart afraid to admit the reasons for their stores failing despite high volume? If they claim theft over and over they are admitting they can't control their own stores. They don't want to allocate payroll to staff the stores the way they should be let alone full staff loss prevention. The receipt checker at the door isn't going to stop a determined thief and certainly not a professional. By the way, when I was out shopping last weekend I noticed that all of the Walmart stores around me now have receipt checkers at the door. It used to just be a couple of kind of sketchy stores. I just walked by and the checker said nothing. Is there anything in general law that forces you to stop? You aren't paying for a membership like with Sam's or Costco where you agree in the terms to have your purchases checked.
storewanderer wrote: March 29th, 2023, 12:16 am The most recent closure that surprises me is the closure in South Bend. This store just looks like it got creamed by Meijer so it is closing. This closure strikes me as a sign of weakness. But it isn't that simple- the roads connecting around the store don't look great, so maybe that is to blame, but I don't know. I really think they lost the Meijer battle.
This is another example of what happens when you actually have competition. Since Kmart has gone bust and Target doesn't seem to be into grocery beyond PFresh, Walmart can just carry along like they always have because no one is going to challenge them at their own game. Me thinks that if Meijer were a national player, Walmart would have to put up or shut up. If Walmart tried to compete with Meijer in their current state I suspect that Walmart would end up contracting back to is core rural and semi-rural markets, areas where Meijer isn't and the suburban areas that Meijer doesn't click but doesn't fail either. I suspect that would be a far cry from the store base that Walmart has now.
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Re: Walmart 2023 Closings

Post by veteran+ »

It is always the same excuses for these businesses.

1. Payroll - if we give you a raise, prices will go up and we will have to cut expenses including your hours.

2. Theft - we are bleeding profits and cannot keep the store open.

3. Unions - every excuse to close but trying hard to never mention the Union.

Meanwhile Greedflation continues, record profits for Executives and stakeholders.

And................there is no holding anyone to account.
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Re: Walmart 2023 Closings

Post by ClownLoach »

mjhale wrote: March 29th, 2023, 5:54 am
storewanderer wrote: March 29th, 2023, 12:16 am The thing is the Supercenter stores Wal Mart closes tend to be high volume stores. Everyone is shocked by the closures in most cases when a Supercenter closes.
Is Walmart afraid to admit the reasons for their stores failing despite high volume? If they claim theft over and over they are admitting they can't control their own stores. They don't want to allocate payroll to staff the stores the way they should be let alone full staff loss prevention. The receipt checker at the door isn't going to stop a determined thief and certainly not a professional. By the way, when I was out shopping last weekend I noticed that all of the Walmart stores around me now have receipt checkers at the door. It used to just be a couple of kind of sketchy stores. I just walked by and the checker said nothing. Is there anything in general law that forces you to stop? You aren't paying for a membership like with Sam's or Costco where you agree in the terms to have your purchases checked.
storewanderer wrote: March 29th, 2023, 12:16 am The most recent closure that surprises me is the closure in South Bend. This store just looks like it got creamed by Meijer so it is closing. This closure strikes me as a sign of weakness. But it isn't that simple- the roads connecting around the store don't look great, so maybe that is to blame, but I don't know. I really think they lost the Meijer battle.
This is another example of what happens when you actually have competition. Since Kmart has gone bust and Target doesn't seem to be into grocery beyond PFresh, Walmart can just carry along like they always have because no one is going to challenge them at their own game. Me thinks that if Meijer were a national player, Walmart would have to put up or shut up. If Walmart tried to compete with Meijer in their current state I suspect that Walmart would end up contracting back to is core rural and semi-rural markets, areas where Meijer isn't and the suburban areas that Meijer doesn't click but doesn't fail either. I suspect that would be a far cry from the store base that Walmart has now.
Walmart's high store volumes mean that comp percentage points are hard to attain, despite Wall Street's demands for them. They cannot afford to have negative comping stores even if they are profitable because of the impact low comps will play on their stock price.

This means that their stores are especially vulnerable to good competition like the Meijer described here. The Walmart might have a bottom line profit in the millions but the damage to the Walton family stock shares far outweighs those dollars so the store is closed immediately. You are correct that a good, competent national competitor would really hurt Walmart because of how they are evaluated and valued by investors.
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Re: Walmart 2023 Closings

Post by jamcool »

Except there aren’t any…Target prefers to have stores in urban/suburban areas only-not in smaller towns. Everyone else is regional.
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Re: Walmart 2023 Closings

Post by arizonaguy »

ClownLoach wrote: March 29th, 2023, 2:43 pm
mjhale wrote: March 29th, 2023, 5:54 am
storewanderer wrote: March 29th, 2023, 12:16 am The thing is the Supercenter stores Wal Mart closes tend to be high volume stores. Everyone is shocked by the closures in most cases when a Supercenter closes.
Is Walmart afraid to admit the reasons for their stores failing despite high volume? If they claim theft over and over they are admitting they can't control their own stores. They don't want to allocate payroll to staff the stores the way they should be let alone full staff loss prevention. The receipt checker at the door isn't going to stop a determined thief and certainly not a professional. By the way, when I was out shopping last weekend I noticed that all of the Walmart stores around me now have receipt checkers at the door. It used to just be a couple of kind of sketchy stores. I just walked by and the checker said nothing. Is there anything in general law that forces you to stop? You aren't paying for a membership like with Sam's or Costco where you agree in the terms to have your purchases checked.
storewanderer wrote: March 29th, 2023, 12:16 am The most recent closure that surprises me is the closure in South Bend. This store just looks like it got creamed by Meijer so it is closing. This closure strikes me as a sign of weakness. But it isn't that simple- the roads connecting around the store don't look great, so maybe that is to blame, but I don't know. I really think they lost the Meijer battle.
This is another example of what happens when you actually have competition. Since Kmart has gone bust and Target doesn't seem to be into grocery beyond PFresh, Walmart can just carry along like they always have because no one is going to challenge them at their own game. Me thinks that if Meijer were a national player, Walmart would have to put up or shut up. If Walmart tried to compete with Meijer in their current state I suspect that Walmart would end up contracting back to is core rural and semi-rural markets, areas where Meijer isn't and the suburban areas that Meijer doesn't click but doesn't fail either. I suspect that would be a far cry from the store base that Walmart has now.
Walmart's high store volumes mean that comp percentage points are hard to attain, despite Wall Street's demands for them. They cannot afford to have negative comping stores even if they are profitable because of the impact low comps will play on their stock price.

This means that their stores are especially vulnerable to good competition like the Meijer described here. The Walmart might have a bottom line profit in the millions but the damage to the Walton family stock shares far outweighs those dollars so the store is closed immediately. You are correct that a good, competent national competitor would really hurt Walmart because of how they are evaluated and valued by investors.
This is precisely the reason why they closed all of those Sam's Clubs back in 2018. Costco is a good, competent national competitor and was hurting Sam's Club and Walmart as a whole.

Now Costco has made some missteps since then which has created an opening for Sam's.

In the 2023 closings there have been 2 closings directly related to Meijer.

South Bend, IN and Plainfield, IL

The Plainfield closing seems worse as it's a closing in an area that Walmart should be successful in. It's a clearly suburban area with a healthy retail corridor and I doubt shrink / theft is the reasoning there. There's a still open Kohl's, Menards, Target and Meijer nearby. This is the type of area that Walmart seems to do very well in in other markets. The store was also very recently renovated.
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Re: Walmart 2023 Closings

Post by Romr123 »

Not to pile on but I believe one of the two Targets in South Bend is a Super Target (Mishawaka) and Meijer has 3 stores. 3 WM stores may just have been one too many to be sustainable (particularly with WM locations surrounding pulling business away from metro South Bend).

I don't think people who haven't lived near Michigan and environs realize how afterthought-y Walmart is in the general area--it's just not a place that you seek out (as you do either Target or Meijer). It's definitely taken on the "bottom-feeder" aspect of K-Mart, plus without huge influxes of in-migration into these regions, there aren't any significant number of people coming into the area with particularly positive feelings about WM...just a vague sense of decrepitude/malaise.
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Re: Walmart 2023 Closings

Post by storewanderer »

Romr123 wrote: March 29th, 2023, 10:49 pm Not to pile on but I believe one of the two Targets in South Bend is a Super Target (Mishawaka) and Meijer has 3 stores. 3 WM stores may just have been one too many to be sustainable (particularly with WM locations surrounding pulling business away from metro South Bend).

I don't think people who haven't lived near Michigan and environs realize how afterthought-y Walmart is in the general area--it's just not a place that you seek out (as you do either Target or Meijer). It's definitely taken on the "bottom-feeder" aspect of K-Mart, plus without huge influxes of in-migration into these regions, there aren't any significant number of people coming into the area with particularly positive feelings about WM...just a vague sense of decrepitude/malaise.
The situation is very similar around Minneapolis. The Wal Mart units are not particularly well located and do not seem particularly high volume.

It is also noticeable in OR/WA where they compete against Fred Meyer. But there are some Wal Mart vs. Fred Meyer match ups where both stores seem very busy.

But in California those are some of the busiest Wal Marts I've seen. Even a few busy Neighborhood Markets (only region I've ever seen busy Neighborhood Markets).
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Re: Walmart 2023 Closings

Post by Alpha8472 »

Walmart in California has some very high volume stores in the San Francisco Bay Area. There is a large amount of theft, but the sales numbers are very high. The profits from the high volume of sales more than makes up for the theft. There are wall to wall customers and lines stretching half-way across the stores.

These Bay Area Walmart stores are not even supercenters. They are non-supercenters with expanded grocery offerings. There is no deli, limited produce, and limited meat. However, these stores do great business because the competition in the Bay Area are higher priced places such as Safeway, Whole Foods, and Target. The selection at Target is very limited compared to Walmart. Costco stores and Trader Joe's are only in a limited number of cities.
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Re: Walmart 2023 Closings

Post by wnetmacman »

At this point in time, and especially after what Doug McMillon said last year, ANY Walmart closing of a high volume, high shrink store should not be a surprise. They simply cannot afford to lose any more.

In the 1980s, Sam Walton personally said that the shrink issue was the biggest threat the company faced at the time; not Kmart or other competition. Items just walking out the door. Things were much different for the company at that time, however. Most stores were built so that you were forced to walk through or at least past a manned checkout to leave. Entrance doors were one way only. You were not allowed to leave through them. With the Supercenter, they changed that. Now you use the same doors. And the poor people greeter has to cover more space, plus we all complain about being stopped to check a receipt. Why?

Because the shopper has changed. We don't want the intrusion. We want to get in and get out. The folks they are stopping are most often the ones who don't need to be stopped. My local store has a 'not bagged' policy. Any cart that has an item not bagged will get checked. If you have it in a bag, you can walk on past. But they do not stop shoppers walking back past them without going through the checkouts. I have personally watched someone with a purse full of electronic items that I could see walk right out the door without paying. (These items have since been locked up, and electronics employees have to check these items out there now)

These closings are in response to the anonymous shoplifter. That stuff that gets out without being detected. Walmart no longer wants to supply the shoplifter. And they have said so specifically.
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