Walmart 2023 Closings

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

Post by storewanderer »

ClownLoach wrote: March 31st, 2023, 3:09 pm

Some of these ratings given by governmental agencies for the purpose of tax assessments are not exactly aligned with current trends. For example if the facility has a drop ceiling, where all lighting and ductwork is concealed then it would typically be rated as a "better" quality building than a more contemporary open warehouse ceiling. Same for linoleum floors vs polished concrete. Technically drop ceilings and linoleum floors are considered more expensive even though they're now outdated. I know nothing of the stores you've mentioned but I've seen this type of situation elsewhere. One of my worst, most dated stores was assessed as most valuable in the county because it had woodgrain slat walls (instead of drywall), recessed fluorescent tubes on a drop ceiling, and an elevator. It was the worst building I had. My shiny new store nearby with warehouse ceiling, beautiful full spectrum LED lights and skylights, and polished floor was considered low end.
I would be really curious what it is that made their buildings C25. The Kietzke unit has a partial drop ceiling (grocery expansion does not). The others all have exposed ceilings warehouse like. Some of these stores were built with tile floors and some were not.

For curiousity I took a look at the old decrepit Kmart building in Sparks too. Built in 1967 and the usual C20 quality.

There is something different on how these Wal Marts are built. Who knows what.
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Re: Walmart 2023 Closings

Post by storewanderer »

I spend a lot of time in Wal Mart locations in recent years.

Wal Mart has an excellent procurement and merchandising operation. Their entire general merchandise program is well merchandised and has decent products. They may be over SKU-ed in some categories. I also think they send some of the wrong products to the wrong stores. In-store execution is a huge problem and if something goes wrong (broken product, warranty, incomplete box, etc.) trying to get any issue resolved by Wal Mart at the store (their corporate customer service hotline is actually great but you have to get burnt by the store before they can escalate properly) will make you never want to shop there again. I actually think their clothing category is great for basic clothing and the quality of their basic private label clothing is, at this point, better quality type of stuff than JCP and Kohl's currently have on a lot of their private labels and all you have to do is feel the fabrics to assess that. The issue is these general merchandise categories in general seem to be having movement problems across all retailers. Many discretionary items and people are buying consumables and only things they need. If you want to "treat yourself" to a fun discretionary item you probably aren't going to Wal Mart for that purpose, but if something breaks and you need it then you probably will just go to Wal Mart if it is convenient.

The busiest Wal Mart locations I see tend to be in California and also in suburbs of other cities that are solidly middle class/skew slightly toward lower middle class. Locations in upper middle class suburb type areas tend to not do as well and are usually very neat, orderly stores. Most of the rural stores also tend to be neat and orderly with decent traffic. My favorite Wal Mart locations are the ones in those 20k population size towns that tend to draw from various smaller surrounding areas. Those are the best operations with stable longer term employees, customers who tend to be respectful of the store, and a good merchandise flow going on. The worst Wal Mart locations are the ones in tough areas in larger cities/suburbs; these stores are not a good experience and despite high traffic they do not feel safe, are usually a mess, understaffed, full of out of stocks, and the parking lots are an adventure.

As far as who their customer is, they have a ton of customers. Again, middle class and lower middle class type families. This is a growing demographic in the United States and that growth will continue to bring new customers to Wal Mart. I do think some smaller chains are expanding and chipping away at Wal Mart's customer base here and there but at the end of the day those customers keep going back to Wal Mart since it sells "everything."

The other thing is there is not a competitor out there who is currently rapidly expanding in an effort to overtake Wal Mart. When we look at Kmart and the various regional discount chains of the past the biggest reason those chains went under was because some other chain came out and built a nicer bigger store with lower prices and a better operation and undercut them. Nobody is really doing that against Wal Mart. While Meijer beats Wal Mart in grocery, they do not beat them in general merchandise as their mix/assortment is much smaller and their private label/buying program isn't even close on general merchandise. Plus Meijer doesn't seem to be expanding very quickly.

Wal Mart does these store remodels on what feels like a 5-7 year schedule and they are not fantastic (though I do like their current grocery decor) but what these remodels are accomplishing is making it so these stores do not fall into the disrepair of the outdated Kmart buildings with the odd odors, yellowing floor tiles, rusted up shelving, falling apart checkouts and counters, bathrooms you could locate by following the odor, etc. The remodels do not make radical changes to the store and it is clear Wal Mart is not trying to somehow reinvent the general merchandise side of the store, it is the same old aisles of stuff thrown around as always.
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Re: Walmart 2023 Closings

Post by veteran+ »

pseudo3d wrote: March 31st, 2023, 8:41 pm
arizonaguy wrote: March 31st, 2023, 7:40 pm
buckguy wrote: March 31st, 2023, 9:46 am

Walmart's failure to keep up with inflation with their same-store comps was buried in their last quarterly report. They had issued a "warning" before the report and then indicated better than expected performance, but it still looked they weren't making progress. They've been stagnating for years, so of course, they have some strong performers and some that aren't doing well and the reasons for each probably vary a bit from place to place. Their current script when they close stores is some sort of "review of operations" which could mean anything. Instantly going to shrink reminds of the old cunard that chains were dying because they were slow to enter the suburbs (yet had lots of stores there) or their stores weren't big enough (when the competition had plenty of similar stores). I doubt we'll see candor until they do something truly radical like sell-off bigger parts of teh business. Blaming shrink even in euphamistically described areas misses that many of those smae places have stores that have been doing fine for many years like Forman Mills in the Mid-Atlantic region. It's not just dollar stores that go where somebody like Target won't.

The thing I keep in mind about Walmart is that there was a time when they seemed tocapture a broader range of customers, even when they competed with Target and relatively solid KMarts. I lived in their territories in the late 80s and this was the case. I didn't live in their territory again untol the end of the 90s and it was evident that they were on their way to becoming the store for people without other options---the stores were neat and well stocked, but the service was non-existent and apathetic, most of the prices had no advantage over other stores (the LA Times did a systematic look at this in the '00s), and despite having more categories of merchandise, the selections often seemed limited within category. The clientele also was different--no longer fully reflective of the trading area. This was around the time that journalists began looking into their reliance on incentives, their abandonment of some communities (while not allowing new takers for their space), their strong arming of suppliers, etc. and it began to reach a point where even development-friendly juristictions didn't want their new locations anymore. Their non-food stagnation began long after and they began looking for other ways to increase profits like their ill-fated effort to enter banking.

Walmart possibily could have been a store with a somewhat different niche, but their model didn't really allow for that and if KMart had magically revived itself, their situation might have become more obvious sooner. They seem willing to make changes around teh margins--the smaller stores, adding more electronics, bringing organics into the food departments, but they haven't worked. They're about 15 years too late with online shopping---most bigboxes began accommodating this in a big way well before COVID. It will help them survive but it's probably too late to broaden their base.

Despite all the supercenters, I wouldn't be surprised if the more traditional stores with a mostly center store food operation might be their path for the future of brick and mortar, at least in places where they don't have a sizable grocery share--they have general merchandise which mostly has greater markups (esp. apparel) than food and they lose the expense of maintaining expensive refrigeration and other equipment and the expense of rotating perishable stock. Walmart is not good at localizing their operations (one reason they failed ina number of foreign countries, but likely true here), so I wonder if they would serously consider doing this---it may be that the market and efforts to cut costs on teh food side make it happen, slowly on its own.
The problem with Walmart is that by the mid 2000s (2005 or so) they essentially had stores everywhere that could support a Walmart store (due to their massive expansion in the 1990s and early 2000s) but spent the next decade 2005 - 2015 or so building and/or opening up stores in places that they had no business being because they couldn't grow organically anymore. They would open a Neighborhood Market in a space that formerly housed a supermarket. They would open supercenters in former Kmarts, Mervyn's or mall department store anchor pads. They didn't seem to care about the demographic trends of the neighborhoods they entered either, it seemed like they were just trying to cram as many stores into as many urban areas as they could. It's no surprise that it's these 2005 - 2015 stores that are failing. Walmart should've never been there in the first place but they weren't putting as much emphasis online so these were the last frontier where they could attempt to open physical stores. The Neighborhood Market concept was also borne out of the idea of getting Walmart's grocery business into areas it couldn't reach with its supercenters.

Another problem is that starting in the early 2000s the dollar stores (Dollar General and Family Dollar)rapidly spread and penetrated it's core rural areas. In many of these places, Walmart was essentially the only full line store (although one would sometimes have to drive a ways to get to a Walmart). With Dollar General and Family Dollar opening up "neighborhood" rural stores, a lot of HBA, dry goods, and mid-week grocery trips were diverted from Walmart to Dollar General or Family Dollar. Walmart realized this in the mid 2010s and tried to blunt the trend of losing this business with its Walmart Express concept which ended up being an abject failure.

There also seems to have been a lot of recent growth in the "farm and fleet" segment of retailing. These hybrid hardware / general merchandise / feed stores have to take another bite out of Walmart's traditional customer base. A former Walmart customer can now get almost everything they need at a combination of a Dollar General / Family Dollar and Rural King / Tractor Supply / etc.

While all of this was going on Walmart made the decision to try to move away from it's "Always low prices" slogan and model to the "Save money, Live better" slogan and resulting price increases as it tried to move upmarket in an attempt to reach more middle to upper middle class shoppers. This move, along with a corresponding cut in SKUs, alienated some of Walmart's working class base (and drove customers to Dollar Genera / Family Dollar as those chains were expanding). Walmart continues to try to attract these upmarket customers with Walmart+ and Walmart.com but the problem is that even before 2008 Walmart lost most of these customers to Amazon and Target and isn't obtaining them back.

I'm not ready to say that Walmart is dying. It's two largest competitors on the general merchandise side, Amazon and Target have their own issues right now. Amazon's first party retail business is not profitable, never has been profitable and has to be subsidized by other areas of Amazon's business that are now less profitable than they were before. Amazon, not Walmart, seems to be the modern day Sears and seems destined to have the same future that Sears had. Profitable parts of Amazon such as AWS will probably survive but the massive money pit of a retail operation that Amazon currently operates will look very different in the not too distant future. We're already seeing consumer unfriendly changes to try to prop up the retail business but probably will simply turn off customers from it.

Target seems to have lost its way and the recent remodels with odd product assortment / space allocations (such as the massive amount of prime space devoted to beauty at a recently renovated store near me), not to mention the fact that Target, even more so than Walmart, has invested heavily in stores in areas where shoplifting prevention and enforcement is difficult,

Walmart's other major, almost nationwide, competitor Kroger (on the food side) is in the midst of attempting to facilitate a merger that will do nothing but weaken itself. The merger will draw attention away from improvements on price, store conditions, merchandising, etc; and will likely lead to Kroger having to increase its pricing.

I believe Walmart now is pretty analogous to how Sam's Club was in 2018. It's in okay shape, it has some problems, it needs to make up for poor real estate decisions, but if it can stay the course while its major competitors deal with major issues of their own, I believe it can come out ahead. I do think Walmart needs to open some new stores in some suburban / exurban / rural areas though.
Walmart Express didn't really work partly because they were small markets and they already had a Dollar General. They weren't even Division 1 stores and ended up not really find a niche. The problem with Walmart is that a lot of its expansions and ventures have all been failures. Store prototypes and expansions that end up closing down within a few years, online acquisitions that get shut down or sold, and an indelible reputation of "trash company for trash people" that harms any attempts to move upscale.

But Walmart is in many ways is in a better position than Amazon, despite not being as trendy. I can't imagine Amazon's retail business was never profitable but overbuilding warehouses for Prime must be cutting into profits...and of course, Amazon Fresh has gone from a pet project in a few cities to a billion-dollar disaster that can't just be written off.
Let's not forget the comical reaction at the time of Tesco's (once world powerful) arrival in the USA (even before they built the first store).
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Re: Walmart 2023 Closings

Post by storewanderer »

veteran+ wrote: April 1st, 2023, 11:38 am
pseudo3d wrote: March 31st, 2023, 8:41 pm
Let's not forget the comical reaction at the time of Tesco's (once world powerful) arrival in the USA (even before they built the first store).
There was a lot of comical reaction at the time of Tesco's arrival to the USA. Wal Mart Marketside, Safeway small format, Vons small format, Walgreens adding in all of that pre-made ready to eat grocery/more produce... also don't forget the additional amount of ready to heat food Trader Joe's added (that has generally stuck to this day and seems to sell well). I don't think Kroger ever got too caught up in chasing Tesco beyond some temporary merchandising changes at Ralphs/Frys/Smiths where they added more heat and serve food items into meat/deli which were terrible and didn't last long. Kroger also probably determined once Fresh & Easy had opened one store that it was going to be a non-factor so there was no reason to do much further beyond watching it struggle.

The Wal Mart Marketside Store format in AZ that was a reaction to Tesco entering the US was not a bad little store. They were in AZ and former Osco (freestanding/corner) Stores. I forget if they had pharmacy. The stores felt more spacious than Fresh & Easy and were presented much nicer. Marketside felt like an upper end Fresh & Easy. It was more like what Fresh & Easy said it would be when it was being designed... and that makes sense because my guess is Marketside was designed before Fresh & Easy even opened... They actually had a quite wide mix of products, and the prices were the same/similar to a normal Wal Mart. The store environment was about on par with Fresh & Easy (industrial) but it felt a bit warmer for some reason (maybe more narrow aisles/taller shelves/more products or maybe the lighting). The quality of fresh product sold in Marketside was noticeably better than a standard Wal Mart. I think the biggest problem with this format is even if it got traffic (it didn't get much) it would not be profitable no matter what. Also if people who wanted to do business with Wal Mart decided to shop there instead of drive further to the larger Supercenter with a bigger mix, Wal Mart would miss out on the extra sales from exposing customers to the larger mix at a Supercenter. So the format made no sense for Wal Mart.

Wal Mart Express was a direct reaction to Dollar General, nothing to do with Tesco. This was much different than the Marketside store format. What is interesting is Wal Mart Express actually FELT LIKE a Fresh & Easy. First aisle (yes aisle) was produce and some refrigeration; no open displays everything was against the wall or on an aisle. The placement of dairy was also just like a Fresh & Easy. Once you got off the first couple aisles this is where it got different as Wal Mart Express threw a pharmacy in against the front wall on one side, and had quite a bit of general merchandise in the rest of the store. This store had surprising mix depth in some categories but was lacking in others. Similar to small format Target units this format just felt "off." This place was basically a Fresh & Easy where they filled a large portion of the store with random general merchandise and threw a pharmacy in.
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Re: Walmart 2023 Closings

Post by arizonaguy »

Looks like Norwalk, CT is going to be another closure.

680 Connecticut Ave Norwalk, CT

https://patch.com/connecticut/norwalk/p ... rget-store

This store is being converted to a Target. It appears that the Walmart lease is ending and they either chose not to renew the lease and/or the landlord preferred Target as a tenant.

This store is another store in a middle class area that seems it would have the demographics that Walmart is trying to target. It does seem like an area that would do well as a Target but I'm surprised Walmart would want to give up this store.
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Re: Walmart 2023 Closings

Post by storewanderer »

arizonaguy wrote: April 9th, 2023, 7:59 pm Looks like Norwalk, CT is going to be another closure.

680 Connecticut Ave Norwalk, CT

https://patch.com/connecticut/norwalk/p ... rget-store

This store is being converted to a Target. It appears that the Walmart lease is ending and they either chose not to renew the lease and/or the landlord preferred Target as a tenant.

This store is another store in a middle class area that seems it would have the demographics that Walmart is trying to target. It does seem like an area that would do well as a Target but I'm surprised Walmart would want to give up this store.
This is an oddly sized/undersized Division 1 Store and there is currently no Target in Norwalk. When it comes to oddly sized/Division 1 stores it seems like Wal Mart wants to get rid of them. However this store has been remodeled in the past few years but is not in the latest package.

It also sounds like the store may have been having theft issues.

There is still another Wal Mart in Norwalk also.

Target might be a better fit for the location anyway, at least it adds Target to Norwalk as opposed to the current set up of no Target but 2 Wal Mart units.
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Re: Walmart 2023 Closings

Post by buckguy »

Wegman's is opening nearby to this center in Norwalk and the Shop-Rite in the same center is renovating (all in the link). The center has proximity to the well-off coastal part of Norwalk and towns like Darien and also has lots of big boxes. At least some recent Walmart closures have been in places like this---strong demographics but lots of competition.
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Re: Walmart 2023 Closings

Post by storewanderer »

buckguy wrote: April 10th, 2023, 5:25 am Wegman's is opening nearby to this center in Norwalk and the Shop-Rite in the same center is renovating (all in the link). The center has proximity to the well-off coastal part of Norwalk and towns like Darien and also has lots of big boxes. At least some recent Walmart closures have been in places like this---strong demographics but lots of competition.
Wegman's and Shop Rite provide grocery competition but as a Division 1 Store this store did not have many groceries so those should not have really been an issue.

The irony is the replacement Target will probably have more groceries inside than this Wal Mart has.

My guess is Target is willing to pay more for the space. Perhaps they will perform better in the space. So Wal Mart goes ahead and lets them have it. The ego move out of Wal Mart would have been to out-bid Target for the space and stay in the space and lose money just to keep Target out. But Wal Mart did not go that route (or the landlord did not wish to play that game), from what it appears. Maybe they are actually level headed in running their business and know when to say when vs. staying in not viable spots for ego reasons.
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Re: Walmart 2023 Closings

Post by mburb1981 »

Even more closures announced today - this time, four locations within the city of Chicago proper are closing.

https://wgntv.com/news/chicago-news/wal ... n-chicago/

I would not be surprised if they exit the city completely by the end of this year.
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Re: Walmart 2023 Closings

Post by arizonaguy »

mburb1981 wrote: April 11th, 2023, 12:07 pm Even more closures announced today - this time, four locations within the city of Chicago proper are closing.

https://wgntv.com/news/chicago-news/wal ... n-chicago/

I would not be surprised if they exit the city completely by the end of this year.
This is a strange announcement.

First, they've gone out and said it was theft (the other announcements were vague as to the reasoning for the store closing).

Second, they're closing in 5 days as opposed to 30 which has been the standard with the other closing announcements this year.

Did these stores get incentives from Chicago, Cook County or the state of Illinois when they opened? It appears that Walmart is fishing for incentives to keep its remaining stores open based upon how this closing announcement is worded.

Chicago is one of the only rust belt cities that Walmart, up until now, had a significant presence in.
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