Walmart, the U.S. department store giant, recently disclosed a series of store closures. This announcement stems from Walmart and property owners refusing to agree on pricing. Hence, the increase in leasing costs prompted these closures.
In a larger view, several retailers opt for store closures as part of strategic relocations in significant cities like California and Chicago. In addition to the list of closures, Walmart included two more stores, increasing the shutdowns that impacted over 20 stores last year.
According to reports, the recently closed stores are in California. Moreover, the affected locations include the Walmart Neighborhood Market in San Diego and El Cajon. Walmart has a network of over 4,622 locations across the United States and a global presence of over 10,500 branches.
As previously stated, the store’s recent closure is due to the inability to meet lease agreements. Notably, the store’s closures affect approximately 357 Walmart employees. The San Diego and El Cajon branches reportedly affect 125 and 232 employees, respectively.
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To address the situation, affected employees were told to transfer to stores near the closed locations. Furthermore, reopening the closed stores and reinstating workers might be possible. However, it heavily depends on whether Walmart successfully negotiates a lease agreement.
Brian Little, Walmart spokesperson, thanked the loyal customers of the location in a statement to Business Insider. “We are grateful to the customers who have given us the privilege of serving them at our San Diego and El Cajon stores,” he stated.
“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,” Little continued. Although different from the performance-driven closures in 2023, it’s hard to overlook the recent shutdowns.
These closures have a massive impact across 13 states. They include Arkansas, Georgia, Hawaii, Kansas, Florida, Indiana, Illinois, Oregon, New Mexico, Minnesota, Washington, Texas, and Wisconsin. Among the closed stores, eight were in Illinois and four in Chicago.
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The challenges these stores face in keeping shoppers are due to the increase in remote workers. Additionally, physical stores are battling competition from online retailers, especially Amazon. According to The Associated Press, Amazon’s grocery delivery service and Amazon Fresh recently gained popularity.
Also. the pandemic efforts have made retailers, including Walmart, revisit the need to keep physical stores open. Despite anticipating an increase in foot traffic after the pandemic restrictions, it has yet to reach pre-pandemic levels.
The Wall Street Journal reported in 2023 that wardrobe rent is hitting record highs. This shows a broader trend where retailers, struggling with increased demand, are experiencing increased rental costs.
Sadly, the impact of Walmart’s closures devastates local communities that heavily depend on it for affordable groceries and daily products. Hopefully, these affected customers can still access the same level of service and qualify by shopping from other alternatives.
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