BIG UPDATE: Walmart announces more store closures for 2024
As we move into 2024, the retail sector is revealing a clearer picture of which companies are thriving and which are struggling in the aftermath of the busy Q4 holiday shopping season. Some retailers have found success, while others, like Macy’s, Kohl’s, and budget-friendly chains Dollar Tree and Family Dollar, are facing significant challenges.
Store Closures and Financial Struggles
Macy’s recently announced plans to close 150 additional stores due to declining sales and reduced foot traffic. Similarly, Kohl’s has sought to revitalize its brand by inviting other stores to share space within its locations, aiming to boost customer interest. Meanwhile, Dollar Tree and Family Dollar have declared intentions to shut down approximately 1,000 stores in 2024, citing adverse economic conditions.
The retail industry is grappling with a crisis of inventory shrink—essentially theft—which has reached record highs across the nation. To combat this, many stores have resorted to locking up high-value items, exacerbating the challenges they face. Consumers are also feeling the pinch, with rising prices for essentials forcing many to cut back on both discretionary spending and necessary purchases. This shift often leads them to seek out cheaper retailers or make sacrifices, particularly in areas like meat and eggs.
Economic Indicators and Consumer Spending
The latest Consumer Price Index (CPI) data released for February showed a 0.4% increase for the month and a 3.2% rise compared to the previous year. Notable price changes for key items during February included:
- Food: 0%
- Energy: 2.3%
- Gasoline: 3.8%
- Fuel oil: 1.1%
- New vehicles: -0.1%
- Used vehicles: 0.5%
- Apparel: 0.6%
- Shelter: 0.4%
- Transportation services: 1.4%
- Medical care services: -0.1%
Walmart’s Response to Economic Pressures
Even major budget retailers like Walmart are feeling the effects of these economic pressures. In 2023, Walmart closed approximately 24 stores due to a combination of lower-than-expected performance, inventory shrink, and the overall economic downturn.
In a press release, Walmart stated, “These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years.” The company had previously invested hundreds of millions of dollars in areas like Chicago, hoping to boost store performance. However, these efforts did not yield significant improvements in addressing the fundamental challenges facing their stores.
As of January 2024, Walmart has already announced the closure of two California stores, with plans to shutter additional locations. The current list of closures includes:
- Walmart Neighborhood Market on Imperial Avenue, San Diego, CA
- Walmart at Fletcher Parkway, El Cajon, CA
- Walmart at Eastland Center Dr, West Covina, CA
- Walmart on Douglas Blvd, Granite Bay, CA
- Walmart on Putty Hill Ave, Towson, MD
- Walmart on High St., Columbus, OH
These closures reflect Walmart’s ongoing efforts to manage underperforming stores, with poor performance cited as the reason for the latest announcements.
Also Read: “New Restaurant Opens in Cleveland: Discover Vienna Corned Beef & Reuben”
