Walmart immediately closed four unprofitable locations in Chicago, citing millions of dollars in losses every year. The shop closings follow Walmart’s announcement of about a dozen closures last month.
“These stores lose tens of millions of dollars a year, and their yearly losses nearly doubled in just the previous five years,” said Walmart in response to the decision to close four locations in Chicago.
The firm claimed that its eight Chicago locations have not been profitable as a whole since their beginnings 17 years ago. As a result of these situations the company decided to reduces the number of shops. Keep reading this post to know did Walmart running at loss and why they Closed four major Chicago stores.
Is Walmart running at loss?
Walmart Reduces the Number of Shops in Chicago to Only Four as Losses Grow
Walmart suddenly announced Tuesday that it would liquidate four underperforming Chicago locations due to millions of dollars in losses each year.
When the first store opened 17 years ago, the firm claimed that none of its eight Chicago locations have been successful. A news release stated that this has resulted in losses of “tens of millions of dollars a year,” losses that have nearly doubled over the last five years.
The four stores will shut down on April 16, although their pharmacies will continue to operate for a further 30 days. The locations are in the Chicago neighborhoods of Chatham, Little Village, Lakeview, and Kenwood.
“Over the years, we have tried many different strategies to improve the business performance of these locations, including building smaller stores, localizing product assortment, and offering services beyond traditional retail,” the company said in a release. “As we looked for solutions, it became even more clear that for these stores, there was nothing leaders could do to help get us to the point where they would be profitable.”
According to Walmart, all workers at these four stores are eligible for transfers to other Walmart stores and will receive payment through August 11. To give them the best chance of surviving in the future, the firm will keep its other four Chicago locations open.
According to media sources, the store closures follow Walmart’s announcement of over a dozen closures last month. Walmart also disclosed in March that it will be firing hundreds of workers at e-commerce fulfillment facilities across the US.
Including Supercenters, discount stores, Sam’s Clubs, and small format stores, the corporation operated more than 5,300 retail locations as of January 31.
Mayor Lori Lightfoot’s Furious Statement
Lori Lightfoot, the outgoing mayor of Chicago, urged Walmart to make sure that the neighborhoods impacted by the closures continue to have a dependable source for necessities.
She stated in a statement that the corporation should also collaborate with neighborhood communities to find new uses for the closed locations.
Mayor Lightfoot, who will leave his position in a month, said:
All communities in Chicago should have access to essential goods and services. That is why I’m incredibly disappointed that Walmart, a strong partner in the past, has announced the closing of several locations throughout the South and West sides of the City. Unceremoniously abandoning these neighborhoods will create barriers to basic needs for thousands of residents. While near-term arrangements will be made for workers, I fear that many will find that their long-term opportunities have been significantly diminished. I call on Walmart to ensure that these soon-to-be-closed stores are repurposed with significant community engagement so they can find a new use to serve their neighborhoods. Walmart also needs to ensure that our residents in these communities that have been left behind will continue to have a reliable source for their everyday necessities. We as a City will do everything in our power to do the same.”
Throughout her tenure, Lightfoot has witnessed the departure of a number of well-known corporations, most notably Citadel and Boeing Co. The withdrawals and criticism from the CEO of McDonald’s Inc. contributed to the idea that the city is falling behind areas with lower taxes.
Even still, Walmart’s choice to retreat was probably influenced in part by its little local presence. Compared to its rivals, the business has much fewer shops in Chicago. For instance, Aldi, a German cheap retailer, has 33 outlets, while Albertsons’ Jewel-Osco chain has 37. Target has 23 sites.
The four Walmart locations, including one Supercenter and three Neighborhood Market variations, will close by April 16. According to Walmart, employees will be able to transfer to other positions within the business, including those in the city’s open sites. Unless they switch to another Walmart employment during that period, employees will be paid until August 11th.
The remaining four Chicago stores still encounter the same financial challenges, but according to Walmart, this choice will give us the best opportunity to support their continued operation and community service.
Walmart’s Announcement
| Today we have made the difficult decision to close four of our stores in Chicago. The decision to close a store is never easy. The impact is greater than just closing a building. It affects people — people who work in, shop in, and live in communities near our stores — and we never take that lightly. Treating people and communities with respect and compassion during this transition will guide everything we do. For example, all associates in these stores are eligible to transfer to another Walmart location. Hiring managers from surrounding facilities will be in each of these stores this week to help associates begin finding their next opportunity. Having an active role in the community is especially important to us. We are proud of our neighborhood investments through local events like Christmas in the Wards, the Always Giving Back Foundation Bike Giveaway, ChiGives Back MLK Day, the Bud Billiken Day Parade, and more. We will continue working with local organizations, creating solutions to challenges faced by the city and country, including racial inequity and food deserts. We continue to help create and expand job opportunities and will leverage our resources to help strengthen the community, especially those underserved. We know the community will have questions about why we are closing these locations. The simplest explanation is that collectively our Chicago stores have not been profitable since we opened the first one nearly 17 years ago – these stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years. The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serve the community. Over the years, we have tried many different strategies to improve the business performance of these locations, including building smaller stores, localizing product assortment, and offering services beyond traditional retail. We have invested hundreds of millions of dollars in the city, including $70 million in the last couple of years to upgrade our stores and build two new Walmart Health facilities and a Walmart Academy training center. It was hoped that these investments would help improve our stores’ performance. Unfortunately, these efforts have not materially improved the fundamental business challenges our stores are facing. Community and city leaders have been open and supportive as we met with them over the years to share these challenges. As we looked for solutions, it became even more clear that for these stores, there was nothing leaders could do to help get us to the point where they would be profitable. With that in mind, we have made the difficult decision to close these underperforming stores in Chicago. The following stores will close to the public by Sunday, April 16:
The pharmacies at these locations will remain open to serve patients for up to 30 days. We will work with local leaders to help find reuse options for these buildings, so they remain important parts of their communities, including the Walmart Academy, which we intend to donate to the community to help further strengthen Chatham and the surrounding neighborhoods. The associates at these stores have made an incredible difference for their customers and communities and every store is filled with stories of associates achieving remarkable things for others and for themselves. We are grateful for everything they have done. They are our priority during this transition.
We are grateful to our associates for their contributions to their communities and for the customers who have given us the privilege of serving them at these Chicago locations. |
The news disappointed Chicago Alderman Howard Brookins Jr. (23rd Ward), who battled for Walmart to come to the city years ago. We believed that we had turned a corner, according to Brookins. “Because there had been persistent rumors for years that the store had been losing money.”
The community will now be compelled to look for alternative stores, Brookins, who is getting ready to retire, said, especially in some South Side neighborhoods like Chatham, which are regarded as food deserts.
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Lavanya (Senior Editor) is a full-time content writer with almost 5 years of experience and a part-time teacher. She joined Medico Topics on the Breaking News trainee scheme in 2022 and now works on MedicoTopics.com. As a lifelong learner, She is constantly curious about learning new things and passionate about sharing knowledge with people through her writing and teaching.