We may only be three weeks into the new year, but many retail stores are already thinking about how to shore up their profits for the upcoming fiscal 2024.
2023 was wrought with store closures and bankruptcies, and many of the remaining retailers are already closely evaluating the upcoming year for potential weak spots, pitfalls, and obstacles.
Take, for example, the state of drug stores last year. CVS (CVS) – Get Free Report, Rite Aid, and Walgreens (WBA) – Get Free Report closed hundreds of stores across the country in areas of underperformance and even more were forced to lock up merchandise that were frequent targets of theft.
Yet others struggled with bankruptcy. Filings in the U.S. hit the highest level in 13 years in 2023, with 50 stores filing for bankruptcy in December 2023 alone. March saw the most in 2023, with 67.
It didn’t matter if you were in the household products segment like Bed Bath & Beyond (BBBY) – Get Free Report or the real estate corner like WeWork (BOWX) – Get Free Report, if you weren’t minding your merchandise and keeping a close eye on inefficiencies, you probably weren’t’ safe.
Even the giants who might have previously seemed impenetrable to downturns, like Amazon (AMZN) – Get Free Report and Walmart (WMT) – Get Free Report, were forced to take a close look at their bottom line and make some hard decisions. In the case of Amazon, this meant a slow drip of employee layoffs. And for Walmart, it meant making the impactful decision to close some stores.
Walmart’s upcoming 2024 store closures
Closing stores can be a tough decision no matter what the retailer, but Walmart’s proximity to a majority of the U.S. population has always been a bright spot on its resume. This can make store closures especially painful not just for Walmart and its bottom line but also for the folks who rely so heavily on it for everything from groceries to household staples.
Hialeah Gardens, Fla., Walmart Supercenter, employee pricing items in arts & crafts supply aisle. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
In 2023, Walmart closed 24 stores in total, up from the originally slated 15. These closures affected 14 states and Washington, D.C., with four stores closing in Chicago and eight closing across the state of Illinois, the most of any state.
For the most part, Walmart blamed underperformance and theft as a central reason for the closures.
“These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years,” Walmart said in a press release, adding, “We have invested hundreds of millions of dollars in the city [of Chicago]… 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.”
Now, Walmart will continue on its path of closures into 2024.
As of now, the retailer only plans to close two locations in the state of California. They are:
Walmart Neighborhood Market on Imperial Avenue, San DiegoWalmart at Fletcher Parkway, El Cajon
The primary reason cited for the closures was that Walmart could not reach an agreement on leasing terms with the space’s owners. Both locations are expected to close on Feb. 9, 2024 and the affected employees will be re-homed elsewhere within the company.