Walmart closes St. Paul (MN) store on University Ave.

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SamSpade
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Walmart closes St. Paul (MN) store on University Ave.

Post by SamSpade » August 28th, 2019, 8:21 pm

The store originally opened in 2004.
Source:
http://www.startribune.com/walmart-to-c ... 558570572/

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Re: Walmart closes St. Paul (MN) store on University Ave.

Post by arizonaguy » August 30th, 2019, 3:07 pm

Walmart seems to have trouble with some "inner city" locations that they opened in the mid 2000s. Some of these locations like one in Oakland and Baldwin Hills in California and one in the Cleveland area closed in 2016, their location in Sacramento which closed last year also seems to fit this same general demographic.

It seems that Walmart does best with its suburban and mid-sized town locations and anything that is either a very small town or a very "urban" area is something that they have trouble with these days.

I was curious why they went the Neighborhood Market route as opposed to a route more similar to the "flexible format" Targets. I think a smaller (40 - 60,000 sq foot) store that has a "curated" mix of Walmart's entire product line as well as offers pickup and delivery would work wonders for Walmart.

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Re: Walmart closes St. Paul (MN) store on University Ave.

Post by Alpha8472 » August 30th, 2019, 4:27 pm

Walmart was probably targeting supermarket chains at that time. They wanted to take on the supermarket chains and run the other supermarkets out of business.

It was a miscalculation on Walmart's end. Customers did not like Walmart's Neighborhood Markets due to the lack of certain items. Often there is no service meat or deli. Many higher priced items are absent. The quality at Walmart is lower than at other supermarkets. Neighborhood Market stores did not kill off the other supermarket chains, and now Walmart sees these stores as failures.

Walmart is used to the profits of crowded supercenters. These Neighborhood Markets lack the general merchandise and are less profitable. Walmart makes most of its money on general merchandise, not groceries.

As the leases expire on these stores, Walmart is closing them down. The first ones to go are usually the ones in high shoplifting areas. If the stores have a lot of shoplifting they will be the first to close. The Oakland, California Walmart was a high shoplifting area and it closed despite having such a high volume of sales. That store was packed with customers, but its profitability did not meet required expectations.

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Re: Walmart closes St. Paul (MN) store on University Ave.

Post by storewanderer » August 30th, 2019, 11:12 pm

I read this MN Store that is closing had over 300 employees. So it was definitely a good volume operation. I suspect theft did it in.

Wal Mart seems to have some major problems operating in areas with dense populations and a combination of high crime/high theft. Somehow their model doesn't seem to work in those areas despite running very high sales volumes. I am surprised they don't just increase prices in those locations to try to counter the theft. Maybe they've already tried that and when entire shelves of drug/HBA items are getting wiped off the shelf in a split second and out the door before anyone can blink, they realized it is a lost cause.

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Re: Walmart closes St. Paul (MN) store on University Ave.

Post by pseudo3d » August 31st, 2019, 6:14 am

Alpha8472 wrote:
August 30th, 2019, 4:27 pm
Walmart was probably targeting supermarket chains at that time. They wanted to take on the supermarket chains and run the other supermarkets out of business.

It was a miscalculation on Walmart's end. Customers did not like Walmart's Neighborhood Markets due to the lack of certain items. Often there is no service meat or deli. Many higher priced items are absent. The quality at Walmart is lower than at other supermarkets. Neighborhood Market stores did not kill off the other supermarket chains, and now Walmart sees these stores as failures.

Walmart is used to the profits of crowded supercenters. These Neighborhood Markets lack the general merchandise and are less profitable. Walmart makes most of its money on general merchandise, not groceries.
I don't know about how Neighborhood Market was a total failure. They were able to gain major ground in some cities, like Dallas-Fort Worth by laying the foundations for larger Supercenter stores (at least two NM stores in DFW I know have been replaced with Supercenters almost immediately across the street) and able to grind down smaller chains (like Minyard or Winn-Dixie). However, there's only a certain amount of market share they can take if they refuse to offer anything close to what other supermarket chains provide as standard.

Since that big wave of store closures a few years ago, has Walmart opened any Neighborhood Market stores?

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Re: Walmart closes St. Paul (MN) store on University Ave.

Post by wnetmacman » August 31st, 2019, 7:11 am

storewanderer wrote:
August 30th, 2019, 11:12 pm
I read this MN Store that is closing had over 300 employees. So it was definitely a good volume operation. I suspect theft did it in.
I'd bet this, in a nutshell. The Home Office has been preaching that it's time to stop the shrink, and if the store can't, they'll close it. The Lafayette, LA Supercenter that was closed earlier this year was the exact same thing, except they opened another Supercenter 4 miles away (and out of city bus range) to take over for it.
pseudo3d wrote:
August 31st, 2019, 6:14 am
I don't know about how Neighborhood Market was a total failure. They were able to gain major ground in some cities, like Dallas-Fort Worth by laying the foundations for larger Supercenter stores (at least two NM stores in DFW I know have been replaced with Supercenters almost immediately across the street) and able to grind down smaller chains (like Minyard or Winn-Dixie). However, there's only a certain amount of market share they can take if they refuse to offer anything close to what other supermarket chains provide as standard.
The Neighborhood Market concept is a very viable business for Walmart. It drives grocery sales. They are supposed to be the fill-in stores between Supercenters. I drove past one in New Iberia, LA on Thursday where the parking lot was full in the middle of the day. They are also being used, as you say, to grind other chains down. Another store in Opelousas, LA is right next to a Super 1 Foods store, and wasn't built there until after the Super 1 was fully operational. It doesn't do nearly the business of Super 1, but it's steady.

I wouldn't write them off just yet; I think they're doing just what Walmart wants them to do.

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