Walmart to Close 269 Stores; Shutting Down 'Express' Format
BENTONVILLE, AR - In what the company is referring to as “sharpened focus on portfolio management,” Walmart will be closing 269 of its locations, including all 102 of its small format Walmart Express stores.
Walmart says instead of its Express stores, it will be renewing its focus on strengthening its Supercenters and Neighborhood Markets, as well as continuing to grow e-commerce business and Pickup services.
“We said in October at our analyst meeting that it's more important now than ever to review our portfolio and close the stores and clubs that should be closed,” said Doug McMillon, President and CEO, of Walmart. “Ultimately, this is in the best interest of our company and reflects the priorities of our growth plan. That plan is focused on winning with stores, deepening our digital relationships with customers and enhancing critical capabilities through technology and data, a next generation supply chain and talent.”
Smaller format stores have been a key focus of other retailers in 2015, including one the company’s biggest competitors Target with its TargetExpress and Target City offerings. Other retailers who have announced small format stores in the past year include Kroger, Raley’s, Ahold, and H-E-B.
In addition to the 102 Walmart Express stores, the retailer is closing 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers, and four Sam’s Clubs, according to a press release. Internationally, the company is closing 115 stores, including 60 in Brazil and 55 in “Latin American markets.”
“We are continuing to grow, and we’re making smart choices in managing our portfolio," McMillon added in a statement. "Even with today’s actions, Walmart will continue to invest in its future, with plans to open more than 300 new stores worldwide over the coming year — in the U.S. Walmart intends to open 50 to 60 Supercenters, 85 to 95 Neighborhood Markets and seven to 10 Sam’s Clubs. We will also open 200 to 240 stores internationally.”
The company estimates 16,000 associates will be impacted by the decision, 10,000 of them in the U.S., who will either be terminated with 60 days of pay or relocated to other nearby locations.
Walmart laid out the financial impact of these closures as approximately $0.20 to $0.22 of diluted earnings per share from continuing operations, with approximately $0.19 to $0.20 expected to impact the fourth quarter of fiscal 2016. The remainder of the impact will fall into the first half of fiscal 2017.
Will Walmart’s shift away from small format locations be a benefit or hold back the retail giant? You can be sure AndNowUKnow will follow the story as it continues.