Walmart Warns of Challenging Year Ahead—Will More Closures Follow?
THE RETAILER PREVIOUSLY CONFIRMED THAT SEVEN LOCATIONS ARE SHUTTING DOWN ACROSS THE COUNTRY.
As the nation's largest retailer, Walmart is a necessity for many of us. However, the big-box retailer recently announced plans to close several stores and pickup only locations, leaving many shoppers concerned about where they'll go for groceries. Walmart deemed these stores "underperforming"—and despite a strong holiday season, executives are concerned about what overall sales will look like for the remainder of 2023. Read on to find out why Walmart is warning about a challenging year ahead, and whether you can expect more store closures to follow.
READ THIS NEXT: These Are All the Walmart Locations Closing Forever by March 10.
Walmart is being "cautious."
During a Feb. 21 earnings call, Walmart executives discussed rising prices and how that might affect shopper behavior and overall business.
"We find ourselves in a similar position to each of the last three years, where there is a great deal of uncertainty looking out over the balance of the year," John David Rainey, chief financial officer and executive vice president for Walmart, said on the call. "While the supply chain issues have largely abated, prices are still high and there is considerable pressure on the consumer."
During the last quarter, Walmart did report strong results from the holiday shopping season (thanks mostly to grocery sales), and an 8.3 percent sales increase at U.S. stores. But the remainder of 2023 is what has Walmart worried, with Rainey adding that it's difficult to predict how the economy will affect shoppers, which is why the company has a "cautious outlook."
"There's just a lot that we don't know," John R. Furner, president and chief executive officer for Walmart U.S., said on the call. "We could tilt into a recession. We don't know what happens to consumer spending. We don't know what happens to layoffs, household income. And so given that we're so early into the year and there's a lot of unknowns right now, we're simply taking a cautious outlook."
Will other Walmart stores close?
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In light of these statements, shoppers may be concerned that this approach could lead to more store closures, which is a known strategy retailers use to cut costs. As CNN Business points out, retailers like Tuesday Morning and Party City just announced closures and filed for bankruptcy, underlining that the so-called retail apocalypse is an ongoing situation.
Walmart executives, however, made no mention of additional closures during the Feb. 21 earnings call, nor did they provide additional details about the confirmed closures.
In a statement to Best Life, a Walmart spokesperson didn't have any comment about future store closures. So—at least for now—it appears that your local Walmart won't be added to the chopping block.
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Some locations already shut down for good.
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While no additional closures are on the docket, Walmart kicked off previously announced closures last week, shutting down two pickup and delivery locations.
The Walmart Pickup sites in Lincolnwood, Illinois, and Bentonville, Arkansas, closed on Feb. 17, leaving the future of the pickup format unclear. In 2022, the only other Walmart Pickup location—in Metairie, Louisiana—also closed for good.
"We are grateful to the customers who have given us the privilege of serving them at our Pickup and Delivery locations," Felicia McCranie, director of global communications at Walmart, previously told Insider. "We look forward to serving them at our other stores in the surrounding communities and on walmart.com."
The rest of the planned closures are happening soon.
The other five Walmart stores are all slated to close before March 10, Walmart officials previously confirmed. Two Walmart Supercenters in the Chicago area are closing—one in Homewood and the other in Plainfield, Illinois.
Florida is losing a Walmart Neighborhood Market in Pinellas Park, while a Walmart Supercenter in Albuquerque, New Mexico, is shutting down, too. The fifth traditional store to close is another Walmart Supercenter in Milwaukee, Wisconsin. Employees at each Walmart will be given the opportunity to transfer to other stores.
"We are grateful to the customers who have given us the privilege of serving them," McCranie previously told Best Life about the closures. "We look forward to serving them at our other stores in the surrounding communities and on walmart.com."