BIG UPDATE: Walmart announces more store closures for 2024
According to The Street, Now that we are three months into the new year, we have a clearer picture of which retailers thrived during the Q4 holiday shopping season and which are facing challenges. Macy’s (M), for example, recently announced it will close 150 more stores due to declining sales and lower foot traffic. Similarly, Kohl’s (KSS) has taken steps to revitalize its brand by inviting other stores into its brick-and-mortar locations in hopes of sparking customer interest. Even budget retailers like Dollar Tree and Family Dollar (DLTR) plan to shutter approximately 1,000 stores in 2024, attributing the closures to worsening economic conditions.
Retailers are facing numerous challenges, with inventory shrink—an industry term for theft—reaching record levels nationwide. To combat this, some stores have resorted to placing high-value items under lock and key. Meanwhile, stubbornly high prices in categories such as food, apparel, and energy have forced consumers to cut back on discretionary spending and, in some cases, even essential purchases. Many shoppers are turning to more affordable retailers or opting to save by cutting back on pricier items like meat and eggs.
The latest Consumer Price Index (CPI), released in February, reflects these economic pressures. The index showed an increase of 0.4% for the month and 3.2% compared to February of last year. Key changes in price categories include:
- 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 Among Retailers Facing Challenges in 2024
Even Walmart (WMT), known for its budget-friendly approach, has felt the economic strain. In 2023, the retail giant closed approximately 24 stores, citing factors such as lower-than-expected performance, rising theft, and economic downturns. In a statement, Walmart noted, “These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years.” Despite significant investments, particularly in Chicago, Walmart’s efforts to improve store performance have not yielded the desired results.
The trend of store closures continues in 2024, with Walmart announcing the shutdown of six more locations, including:
- San Diego, CA: 2121 Imperial Ave.
- El Cajon, CA: 605 Fletcher Parkway
- West Covina, CA: 2753 E. Eastland Center Dr.
- Granite Bay, CA: 4080 Douglas Blvd
- Towson, MD: 1238 Putty Hill Ave
- Columbus, OH: 3579 S. High St.
Walmart cited poor performance as the primary reason for these closures, though the company did not provide further details. As prices remain high and economic uncertainty persists, more retailers are likely to follow suit with downsizing or restructuring efforts in 2024.
