Walmart Announces More Closures In Some of the Larger U.S. Cities

Recently Walmart department stores has announced its most recent bout of U.S. store closures. This increase in closures seems to be the result of the ever rising cost of rent, making it difficult for Walmart and property owners to come to a leasing agreement. Walmart isn’t the only retailer suffering from these circumstances, sadly many larger retailers are being forced to either close their doors or relocate out of the bigger cities and states. Let’s dive in and take a look at a few of the factors leading to store closures.

Where Do Store Employees Go?

In San Diego alone 125 employees were negatively affected by store closures and relocations, this isn’t including the other 232 employees at the neighboring El Cajon store. That’s a total of 357 employees displaced to no fault of their own.

Ofcourse Walmart was gracious enough to offer the employees the option to transfer to the nearest stores. Hopefully in the future Walmart can reach lease agreements with the leaseholders, allowing for these store locations to reopen, and give these employees and opportunity to return to work at a location that is local to them.

Affected Locations

Walmart recently announced that it would be adding two more locations to its growing list of stores that have been closed in the last year.

Both store closures are located in California, one being the Walmart Neighborhood Market in San Diego, the other being in El Cajon. These newly closed stores are both located in California. One is the Walmart Neighborhood.

Former Closures

These closures are related to the performance-driven closures that occurred in 2023, but it is still worth noting the context that these closures are in.

This affected 13 different states, Florida, Hawaii, Georgia, Arkansas, Kansas, Illinois, Indiana, New Mexico, Minnesota, Texas, Oregon, Washington, and Wisconsin. A whopping eight of these closures were located in Illinois alone, with four of those being in the larger city Chicago.

Showing Gratitude

Walmart spokesperson Brian Little showed his appreciation and thanks to its loyal customers of those closed locations in a statement he made to Business Insider.

Little stated Walmart is “grateful to the customers who have given us the privilege of serving them at our San Diego and El Cajon stores. We look forward to continuing to serve them at any of our many locations across the area, on Walmart.com, and through delivery to their home or business.” Although it is sad to see these locations shut their doors, it’s refreshing that Walmarts higher ups are taking time to show appreciation to its loyal customers.

Results From The Pandemic

The pandemic had profound effects on many people financially, this is especially true for retailers like Walmart.

Since the pandemic people have grown accustomed to not being in public, causing a consistent decline in foot traffic at local retailer stores. Many believed that once the restrictions were lifted that foot traffic would return to its pre-pandemic state, however it still hasn’t reached the numbers it used to have, and has become a cause for concern.

Retailers Alike Closing Their Doors

Target, among other large retailers have been forced to close many of their retail locations as well. In 2023 Target announced nine of their stores would be closing due to a rise in theft and organized retail crime.

CVS announced in 2021 that it would be closing 300 of its stores per year for the next three years. They also have pharmacies inside various Target locations and have announced they will be closing a dozen of them in 2024. These closures seem to be affecting many large retailers, not just Walmart.

Rising Rental Prices

In 2023 The Wall Street Journal reported that warehouse rent had skyrocketed and reached an all time high. Similarly, retailers are subjected to the same consequences of there being a higher demand, which only causes rental cost to continue to increase.

There aren’t enough locations available that are suitable for large retailers, and according to GlobeSt there is a massive imbalance between supply and demand.

Retail Theft

Walmart CEO Doug McMillion commented in December of 2022 on the growing concern for retail crime and theft, “Theft is an issue, It’s higher than what it has historically been,”

“We’ve got safety measures, security measures that we’ve put in place by store location. I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it.” Regardless of their efforts, retail theft continues to negatively affect these stores.

Theft Continuing To Be An Issue

Over the last few years the rise in retail theft has become one of the main reasons for store closures in larger cities.

In 2023 the Council on Criminal Justice released a report highlighting recent shoplifting trends. It had shown that between 2019 and 2021 the median amount of goods stolen from stores had increased from $75 to $100. The continuing uptick in retail theft is a major concern and contributing factor to the closure of these store locations.

Self-Checkout Is Risky Business

This is a hot topic in the world of retail stores, many believe the introduction of self-checkout machines was an offense to the people seeking jobs, current employees and to the stores themselves. While retailers saw this as a means to cut cost on payroll, they ultimately end up paying for it twice over in retail theft.

Self-checkout terminals allow for items to be easily or purposefully missed by the customer, making it almost impossible for the retailer to get accurate data on just how often theft is occurring.

Possible Future Closures

Sadly with rising rental cost, continuous retail theft, and poor performances at certain stores, it’s hard to conclude that more store closures won’t be a part of these retailers’ future.

Walmart closures have had profound impacts on local communities who are reliant on the inexpensive cost for their everyday products and groceries. With the closure trend continuing to rise, we can only hope that these customers are able to find a suitable replacement.