Walmart 2023 Closings

[storewanderer]

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.

If these closing stores in areas such as Chicago or Portland are such a mistake for Wal Mart to close, I am sure we will see Target (or even Meijer/Fred Meyer) go ahead and move into the buildings and take them over, right? The competitors would be stupid to let such an opportunity pass them by.

If nobody else takes the buildings, I think it is pretty clear that these buildings are not viable for other similar retailers to Wal Mart either. Let's go- let's have the competitors take these stores over and show Wal Mart how it is done.

The only reason Wal Marts were even approved in the first place in these cities is because no other retailer would open stores there.

[veteran+]

"The only reason Wal Marts were even approved in the first place in these cities is because no other retailer would open stores there."

How do you know that for sure?

[wnetmacman]

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.

I remember a Wal-Mart (Not Walmart) where things didn't have to be locked up, and where you could only enter, not exit through one set of doors. I think this one simple change could turn a great deal of the shrink down. But the company (and a lot of the time, local and state fire codes) makes all open doors two way. This is where a lot of merchandise walks out. I've seen it in my local store firsthand, and because the 'customer' didn't come from the checkout, nothing was said until the alarms tripped, by which point she was gone. The Wal-Mart of old didn't put up with it, but the Walmart of today would rather make everyone happy and let some go by. The rash of closings due to the shrink factor is a kneejerk poor reaction, like fixing symptoms instead of the real problem, same with the locked cases.

[wnetmacman]

"The only reason Wal Marts were even approved in the first place in these cities is because no other retailer would open stores there."

How do you know that for sure?

How many Target stores are in Chicago proper versus the suburbs? Go to Target's locator and you will have your answer. Target is the only competitor in Chicago. Meijer hasn't wrapped into the city limits yet. Probably won't. And don't expect Target to take over a failed Walmart. Walmart is the Gold Standard in making a location work. If they can't, nobody else tries. Go look at any of their stores elsewhere that have closed in the last several years. Houston and Dallas have a few large buildings that either sit dormant or have been repurposed. Lafayette, LA has been turned into a two tenant warehouse. Retail doesn't want them if Walmart can't make them work.

[veteran+]

Hmmmmmmmmm.............................perhaps.

What about all those "successful" operators that had to close when Wal Mart opened?

[ClownLoach]

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.

And what happens when you go through the register inside the corral with those items you wanted? You get bags and a receipt. Couldn't make it any easier for thieves to steal from the rest of the store now. They can just load up whatever else they want in those bags then walk out undetected. If a useless Checkpoint alarm goes off they've got a receipt to wave.

I think the majority of these corrals are store or local management "DIY" projects. The space planning elements and oddball fixtures give them away. I have seen a handful at Walmart where it was obvious that the company designed the setup and they were in center store, closer to the registers with different fixtures that had proper corner boxes to form a true corral and the other aisles cut down to 4ft high turned in a different direction. Corner parabolic mirrors were up along with several overhead screens turned so the cashier could see and supervise. These have an electronically alarmed one way gate for entry, a sensormatic gate at the checkout which is the only exit and the cashier can see everyone in the department. This might be an effective deterrent for non professional thieves.

The "DIY" ones usually just shove some rolling cart with the wheels removed along the side wall and then shoehorn a check stand at the front. This is a complete waste because the cashier can't see 75% or more of the product, nor are they positioned well enough to stop customers from walking right last them. Only the honest customers actually stop to pay in that environment.

I noticed that Home Depot is busting down all the remaining corrals for power tools now that they're 100% in lock up cages. They used to just have a "wall" at the back and some stores had a register in the department. All their padlocks have stickers on them reminding the employee "Bring It Up if it's Locked Up" and they seem to follow this religiously, so I'm going to assume that their LP folks monitor the video and will severely discipline or terminate employees who just hand off product to the customer. But if it's locking peg items they still hand off the single unit to the customer.

As far as glass cases go, they obviously require more payroll but these dumb chains like Walmart won't change their model. So they basically force malicious compliance as overworked employees just hand customers the product. And when it's low dollar product that really shouldn't be locked up in the first place they're just sending the message that the entire exercise is a waste of time.

I haven't spent much time at the Disneyland Target that has turned into a Walmart style lock down environment (Full glass cases for entire departments including cosmetics, laundry detergent, medications, small electronics) to see if they do a better job of handling the issue. I did see at least half a dozen uniformed LP people there and got the impression they handle the glass cases instead of regular team members so maybe that is the way to go if they just have to lock everything up? I still don't know why they changed that very old store (an original Target from the 80's in a converted Fedmart) from one entrance to two. The second set of doors must account for a significant increase in shrink.

[ClownLoach]

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.

I believe Walmart was maintaining a "loss leader" business in foods for many years, at least in SoCal since they started converting standard stores to mini supercenters. It is very apparant that they can no longer afford to do so, and price increases coupled with their EDLP model means that there are zero bargains to be had in foods there now. I fully agree that they are now as expensive or more so than Albertsons across the board. Winco absolutely crushes them on price, and although they both sell about the same quality level the higher volume at Winco ensures that their product is fresh especially in produce where some vegetables may turn over completely every hour.

[storewanderer]

"The only reason Wal Marts were even approved in the first place in these cities is because no other retailer would open stores there."

How do you know that for sure?

Because you know these cities, you know their politics, you know the power the unions have in these cities... they would not have approved Wal Mart to open unless it was their only option for a retailer to come in and open up in these locations.

But if I am wrong about this, then the good news is the buildings are about to become available so those other retailers can now come in and open stores.

Hopefully we don't see the Wal Marts subdivided between DD's Discounts, Aldi, Family/Dollar General/Tree and a Thrift Store.

[retailfanmitchell019]

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.

Walmart is also weak around Chicago.
Meijer is #2, behind the crown Jewel.
https://www.thepacker.com/news/industry ... 7.52%25%29.

[storewanderer]

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.

Walmart is also weak around Chicago.
Meijer is #2, behind the crown Jewel.
https://www.thepacker.com/news/industry ... 7.52%25%29.

Those numbers are for the "Chicago area." Meijer has zero stores in Chicago proper (the areas where Wal Mart is closing 4 stores). It will also be interesting to see how those numbers change once the closures Wal Mart is doing are reflected. I am guessing it will cost them a percent of share.

The nearest Meijer to Chicago proper is 10+ miles away from the center of Chicago, down in Evergreen Park. Meijer actually hasn't done all that great around Chicago. They did close two "Marketplace" (their answer to Wal Mart Neighborhood Market) units in Berwyn and Melrose Park in 2017 (those opened in 2011 and 2012 respectively) and also in 2016 closed a full-ish size (102k sq ft) store in Niles in 2016 that opened in 2010. Perhaps after those closures things got better for them. They have done many remodels since these closures. But they have had more problems in Chicago than a lot of other markets.

Chicago is a difficult market. You would need to go walk some stores there to understand. The customer base is very demanding and very particular with what they want to purchase, and they are somewhat price sensitive. You have some very picky cooks there who want ingredients that meet their exact standards. You have to look at how they rejected Safeway's California/no competition style of operations (super high pricing, too much private label, regional brands downplayed or gone) to get an idea of what the customer in that market will and won't put up with.

I am surprised Target is not showing up in the top 5 given the number of stores they have around there, both small format and larger size. But they are such a lousy grocer and there are so many better options in Chicago area, I am not too surprised. Super Kmart was also quite weak around Chicago.