Wal-Mart announced today that it would be closing 154 stores in the United States and a total of 269 worldwide.
Wal-Mart will open more than it closes as it shifts focus
While it will hardly come as a comfort for the 16,000 employees whose jobs will be affected by the closures, it’s hardly a “doom and gloom” scenario for the Walton family or investors. The company, while shuttering the 269 locations, plans to 405 worldwide in the fiscal year. 10,000 of those employees are in the United States but the use of the word affected rather than laid-off is used for a reason. Over 95% of the stores closing in the United States are within 10 miles of another Wal-Mart property and Wal-Mart will try to transfer affected employees when possible.
So, a number of these workers may have a longer commute, but at the same time it may prove easier and shorter for a number of them as well. The bulk of the domestic closures are Walmart Express stores with those properties making up 102 of the 154 stores slated to close their doors. Those are the same stores that were rebranded as Neighborhood Market in 2014.
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The other closures include 12 Supercenters, 23 Neighborhood Markets, six discount centers, four Sam’s Clubs and seven stores in the fledgling Puerto Rico market.
Wal-mart international closures and fleet (stores) realignment
Brazil is seeing the biggest hit with 60 stores being closed, but collectively these unprofitable stores make up only 5% of Wal-Mart’s sales in the country. The bulk of the remaining closures are located throughout Latin America and, not surprisingly, lose money each year in small markets.
Internationally, Wal-Mart will open between 200 and 240 stores as well as up to 10 Sam’s Clubs.
50 to 60 Supercenters will open before Feb. 1, 2017 in the United States while the same time period will see 85 to 95 Neighborhood Market locations pop-up in areas with strong local economies.
The closings, and openings, don’t come as a terrific shock after CEO Doug McMillon told analysts in October that he was looking at the company’s fleet/portfolio of stores.
“No doubt our business has become both large and broad. It is more important now than ever that we evaluate our portfolio,” he said. “We have closed stores across several markets and we will continue reviewing our fleet in a disciplined way.”