And Walmart plans to open 405 stores globally in the coming year. 95 percent of the closed U.S. stores are within 10 miles of another Walmart store. They're just consolidating smaller stores into bigger ones. They experimented with express stores 5 years ago, found it didn't work as well as hoped, so they canned them. These decisions make strong business sense.
The article makes it seem like it is doom and gloom for the company but they are doing just fine.
I didn't really get doom and gloom from the article - most of the statements were either factual (for example, commenting that the express stores made up less than 1% of global revenue), or what I would consider to be fairly apt speculation (suggesting that closing express stores reflects that Walmart didn't see the business it had hoped, this suggestion coming right after a paragraph that explains the function of the Express Stores).
I mean, the comments they had from analysts even basically echoed your sentiment that it's just business sense, so I'm not sure how you got Doom and Gloom from the article. The title is a bit bait-ish I guess, but the rest is fairly normal reporting.
Thanks for the 95% closing stat being stores that are close together. My wife and I live in a small town in the mountains of Central Arizona and we have a Walmart store in the closest big town (60K population) that is just a 20 minute drive. We both like and rely on that store. There are no other Walmart stores within about 60 miles of that one, so hopefully it is safe. This store is a major employer in the area. It would be a bummer if those already marginalized workers lost their jobs.
Walmart is often critized for hurting local jobs - replacing successful independant business owners with lower-paid employee jobs.
If this is true, Walmart leaving an area should be (at worst) job-neutral.
If Wal-Mart were to close more than just the "Express" stores, it would take a while for those local businesses to reestablish themselves and start hiring. It wouldn't likely be job neutral for a long time and in some areas might just permanently disrupt the community.
I live in Vancouver BC. To my knowledge, we don't have a Walmart within the city, the nearest location to downtown being in North Van, a suburb located across the Burrard Inlet and certainly more than 20 mins by car from downtown. 20 minutes ain't too bad.
Good point. Several other retailers (Sears, Footlocker, Macy's) are also closing stores but the difference is that Wal Mart is planning on opening stores in stronger markets whereas those other retailers are not.
Three Walmart Express stores in north Alabama have opened in approximately the last year; one of those (New Hope or Owen's Crossroads; can't remember where it is exactly) had just opened a couple weeks ago. It might be within 10 miles of a supercenter while the other two are not. None of the three have been open long enough to force their competition out of business, fortunately.
Your "experimented with express stores 5 years ago" doesn't quite catch the nuance of this change. All of these stores are new construction---there's a fair bit of sunk capital involved.
This is the opposite of the trend in the UK. Reverting from the big stores and opening shit tons of sainsburys local, tesco express and metro, little waitrose etc
The prices aren't much different to the full-size stores, but they (understandably) only stock the small sizes of everything. You wouldn't buy in bulk there.
The prices are the same, but the selection is different. The small stores typically don't stock any budget brand goods, they only stock the average and luxury version.
They've out-competed a huge number of independent stores, since the supply chain of Tesco allows them to keep the small store well-stocked at relatively small cost, and with less floor space needed for a stock room. A lorry drops off two or three pallets of goods at the small store on its way to a supermarket. An independent shop can't compete with close to free delivery and the purchasing power of Tesco.
I used to live 5 minutes walk from a Tesco Express, and did almost all my food shopping there. I'd only go to the supermarket (15 minutes cycle away) if I'd run out of something unusual.
As a non-UK individual that visits occasionally, I would say that is because they are really useful stores: good selection at good prices in a very convenient location. I've never seen anything remotely equivalent in Canada or the US. In North America, the smaller stores either have nothing I want to buy, high prices, or most often, both. Further, it is rare to find the equivalent convenience of a high street shop.
Oh, yes, it's a single thing I miss in North America. Good local stores. I live in major city downtown and need to walk 2km to the closest store. In London, I had local Tesco that had 90% of things I needed daily, and I shopped there a few times a day when passing by. Here, if I forget to buy one thing, it's either a long walk back or do without.
I live in Chicago and frequently shop at one of the Walmart Expresses that's closing on Sunday. Obviously it doesn't have the selection of a suburban supermarket many times its size, but I've never had a problem buying normal things there. And with the possible exception of Aldi, it has the best prices in the city.
I'm sure it has something to do with being in a big city.
Aldi owns Trader Joe's, where I shop frequently. I LOVE shopping somewhere with only 4 or 5 aisles; so much more convenient than our local Safeway with 15 or 20 aisles that takes ages to walk back and forth as you keep remembering where items are. I can't imagine shopping regularly at a full-size WalMart.
Well, to be fair, I have never really seen a Walmart express let alone shopped at one, but that is part of my point. Near my uncle-in-law's place (greater London area), there are no less than three competing high street grocery stores each with good selection and good prices.
I generally agree. Convenience stores in the US are in a generally lower tier in terms of both quality and selection. Even in fairly dense urban environments, you basically have 7-11, full-fledged grocery stores, and maybe some local ethnic and upscale markets. But there isn't much in the way of chain mini-grocery stores.
Waitrose couldn't make it pay and closed them. But yeah, it is a trend across Europe, not just the UK. The buzzword phrase in logistics is Massification to Atomisation.
It is a knock on from the daily delivery movement to larger stores.
I think the problem Morrisons had was that they do all their own logistics, whereas the others use a mix of internal and external suppliers.
I've only seen one of these stores while traveling, and it seemed to target the small township due to it being the only one in town. So my guess is that a private individual will take advantage of their closure by buying their property after liquidation, and so the employees will simply switch employers. This is why I'm not bothered by the "16,000 workers losing their jobs" statement.
The text in the article is The store closures are to affect 16,000 jobs internationally, some 10,000 of those positions in the United States.
Looking at the Walmart press release, there is apparently a real difference, as they will try to give many of those employees positions in nearby stores:
In total, approximately 16,000 associates will be impacted by the decision, about 10,000 of them in the U.S. More than 95 percent of the closed stores in the U.S. are within 10 miles on average of another Walmart, and the hope is that these associates will be placed in nearby locations. Where that isn’t possible, the company will provide 60 days of pay and, if eligible, severance, as well as resume and interview skills training. Whether with Walmart or elsewhere, the company’s objective is to help all associates find their next job opportunity.
I don't see any of these express locations in NYC, but there is an "express" type Target relatively close to me in Brooklyn, and it's abysmal.
It doesn't really do anything for them. I saw that Target logo over by Barclays Center and thought, "Oh thank god! A real store where I can buy a variety of things and consolidate shopping trips. And it's on my way home from the work commute. Great!"
Nope. It's not any better than a RiteAid or some mom and pop dollar store or "grocery" shop.
When I found out that there was another Target even closer to me, I almost didn't bother going. I'm glad I did because it was a genuine (from my perspective as a Texan) Target store.
If Wal-Mart had these express stores in my area, I wouldn't bother. If I can't find what I need in your store anyway, I'd rather deal with a local and have the relationship with the business owner where I can at least say, "Hey, I shop here all the time. I am really frustrated that I can't find X. Would you consider placing an order for it if I promise to buy X of them every month?"
That works.
Good luck doing that at a Wal-Mart or a Target.
As much as I absolutely despise shopping in Brooklyn, I appreciate the locals. They really will help you out if you make it a point to develop a relationship with them.
And I'm not talking about the hipster-run artisanal crowd. I'm talking about the immigrants who bust ass and deal with hate speech and accusations of terrorism every time something goes down.
I hate the fact that they are good businessmen and stock only the junk food and cheap crap that people buy. It makes my life more difficult. But they are responding correctly to their market.
The difference between these guys and the shitty Target store at Barclays is that I can build a relationship with them. The goods for sale are pretty much the same.
And plus, when you are alone and single and new to the city and shit happens in France like it did a couple months ago, you can go hang out with a bunch of Muslims who know your name and drink free beer while they say 'Vive La France' and condemn that terroristic bullshit and support their community.
Try that at a Wal-Mart Express or a gimped up Target store.
I don't think the big stores like that can really succeed competing with the locals in a place like NYC. I would guess it's the same in other dense population centers like DC.
What makes the Barclay's Center Target different than other Targets? I went just last week and found it the same as any other Target I've been to in the US (clothes, cleaning supplies, home goods, electronics, toys, non-fresh food, etc.)
I was shocked to learn (on the news this morning) that 2 WalMart stores in the Bay Area are closing (Oakland and San Jose (Monterey Highway)). I don't know there were ANY until a week or two ago when I did a Google Maps search.
My hatred of them goes back to my youth and early online activism from when WalMart was pushing out local mom and pop record stores in small towns and replacing them with their shitty censored versions of music. (WalMart insisted that labels manufacture and sell censored copies just so they could push their twisted morals on America).
Needless to say, nothing they have done in the past twenty years has made them any more deserving of my dollars. I've never bought anything there and never will. Fortunately we live in an area of the country where it's easier to avoid them than it is to shop there, even if you wanted to.
It's about using their power to create and push an inferior product (censored music created especially for WalMart). At the time (early-mid 90s) I was a teenager, so it was a big deal that others who couldn't drive no longer had the option to buy proper versions of music thanks to WalMart's heavy hand.
WalMart shoppers vote with their dollars, and so do I.
Walmart's MO was/is to beat the prices of local businesses, operating at a loss (subsidized by other stores), until those businesses die. Then it can jack prices back up.
They had a playbook for crushing both small local retailers and regional chains.
A big part of it was selling stuff at a loss and getting around zoning rules by dropping stores in outlying areas outside of towns, extracting tax concessions in the process. As the GP mentioned, they were selective in stocking of books, CDs and other media. Lots of Jesus stuff and "family friendly" fare, which kept the local ministers and conservatives happy.
They also used their distribution as a weapon -- their market power let them cut national deals with big vendors like P&G and actually make them rent space on WalMart trucks.
Walmart would expand by building multiple stores in a region, surrounding denser communities. Doing that and exploiting those national accounts let them flood the region with goods, and kill the regional distributors that traditional discount stores and local stores depended on.
Once the competition is dead, prices float back up. We're all stuck with a shitty shopping experience and high prices. Now they use their dominant position to extract direct and indirect government subsidy on top of everything else. The company may be a triumph of some version of capitalism, but they are a cancer on society.
Are they "crushing both small local retailers and regional chains" or just competing with them? Would it have been better had they not competed?
And yes, Walmart drove hard bargains with their suppliers. Why not? They were offering those suppliers a ton of business. If the suppliers didn't like the deal, they didn't have to take it.
I just disagree that Walmart is a bad thing at all. Like I said, nobody is forced to shop there. If customers didn't like it, they could continue to shop at their mom-and-pop stores, but the important thing to note is they didn't.
They also tune prices to local markets; if there is no local competition in a product category, prices are higher than at a comparable store with aggressive nearby competition. They were using Big Data before it was a household term.
Tagging Amazon with the same world-dominating price cutting that Walmart has practiced is a little bit unfair, as they offer a lot of other unique things a long side of just purchasing stuff. The most notable feature being that you don't have to leave your house to buy stuff.
Are there many small businesses competing on these terms? If a service exists that allows me to save my time by not having to schlep myself to some store across town only to find that what I wanted is out of stock, or doesn't fit, or etc, then isn't it my prerogative to take advantage of it? Indeed, isn't the burden of proof on the companies that don't offer this to explain why I should shop there?
Amazon beats the competition on prices, selection, ease-of-use, logistics, and customer service, but I'm a bad person for buying from them? Oh let's not forget that the vast majority of mom-and-pop stores aren't offering insurance or benefits to their employees, selling mostly ethically sourced products (not saying Amazon does, just that most other people don't either), or finding ways to reduce their supply-chain footprint.
I'm not trying to say that Amazon is a saint, but let's not idealize everyone that isn't a huge corporation. People are people.
Out of the stores that Walmart is shutting down in California region, few of the stores were doing very well and located in the best areas for their customer base in So. Cal. Then there were some stores that were just redesigned. This makes me think if it could again be union-related issues in California.
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[ 1396 ms ] story [ 1876 ms ] threadThe article makes it seem like it is doom and gloom for the company but they are doing just fine.
I mean, the comments they had from analysts even basically echoed your sentiment that it's just business sense, so I'm not sure how you got Doom and Gloom from the article. The title is a bit bait-ish I guess, but the rest is fairly normal reporting.
Walmart is often critized for hurting local jobs - replacing successful independant business owners with lower-paid employee jobs. If this is true, Walmart leaving an area should be (at worst) job-neutral.
That statmeent is the reason every bricks & mortar European retailer has failed in the US. Very interesting.
Press release - https://news.walmart.com/news-archive/2016/01/15/walmart-con...
Closure map - https://i.imgur.com/jTgNt21.jpg
Your "experimented with express stores 5 years ago" doesn't quite catch the nuance of this change. All of these stores are new construction---there's a fair bit of sunk capital involved.
Walmart is flailing.
They've out-competed a huge number of independent stores, since the supply chain of Tesco allows them to keep the small store well-stocked at relatively small cost, and with less floor space needed for a stock room. A lorry drops off two or three pallets of goods at the small store on its way to a supermarket. An independent shop can't compete with close to free delivery and the purchasing power of Tesco.
I used to live 5 minutes walk from a Tesco Express, and did almost all my food shopping there. I'd only go to the supermarket (15 minutes cycle away) if I'd run out of something unusual.
They also store less products in premium shelves and only the expensive brands (and no bulk for things like sodas, milk, etc.).
I'm sure it has something to do with being in a big city.
Not quite. They're owned by different branches of the same family.
http://www.slate.com/blogs/browbeat/2013/12/02/aldi_grocery_...
It is a knock on from the daily delivery movement to larger stores.
I think the problem Morrisons had was that they do all their own logistics, whereas the others use a mix of internal and external suppliers.
Citation? I still see Little Waitrose everywhere...
Morrisons do all their own logistics rather than outsource but their local stores did not fare well.
> The supermarket chain sold 140 shops for £25m. The stores made an operating loss of £36m last year.
http://www.bbc.com/news/uk-england-leeds-34637187
Looking at the Walmart press release, there is apparently a real difference, as they will try to give many of those employees positions in nearby stores:
http://news.walmart.com/news-archive/2016/01/15/walmart-cont...
In total, approximately 16,000 associates will be impacted by the decision, about 10,000 of them in the U.S. More than 95 percent of the closed stores in the U.S. are within 10 miles on average of another Walmart, and the hope is that these associates will be placed in nearby locations. Where that isn’t possible, the company will provide 60 days of pay and, if eligible, severance, as well as resume and interview skills training. Whether with Walmart or elsewhere, the company’s objective is to help all associates find their next job opportunity.
I don't see any of these express locations in NYC, but there is an "express" type Target relatively close to me in Brooklyn, and it's abysmal.
It doesn't really do anything for them. I saw that Target logo over by Barclays Center and thought, "Oh thank god! A real store where I can buy a variety of things and consolidate shopping trips. And it's on my way home from the work commute. Great!"
Nope. It's not any better than a RiteAid or some mom and pop dollar store or "grocery" shop.
When I found out that there was another Target even closer to me, I almost didn't bother going. I'm glad I did because it was a genuine (from my perspective as a Texan) Target store.
If Wal-Mart had these express stores in my area, I wouldn't bother. If I can't find what I need in your store anyway, I'd rather deal with a local and have the relationship with the business owner where I can at least say, "Hey, I shop here all the time. I am really frustrated that I can't find X. Would you consider placing an order for it if I promise to buy X of them every month?"
That works.
Good luck doing that at a Wal-Mart or a Target.
As much as I absolutely despise shopping in Brooklyn, I appreciate the locals. They really will help you out if you make it a point to develop a relationship with them.
And I'm not talking about the hipster-run artisanal crowd. I'm talking about the immigrants who bust ass and deal with hate speech and accusations of terrorism every time something goes down.
I hate the fact that they are good businessmen and stock only the junk food and cheap crap that people buy. It makes my life more difficult. But they are responding correctly to their market.
The difference between these guys and the shitty Target store at Barclays is that I can build a relationship with them. The goods for sale are pretty much the same.
And plus, when you are alone and single and new to the city and shit happens in France like it did a couple months ago, you can go hang out with a bunch of Muslims who know your name and drink free beer while they say 'Vive La France' and condemn that terroristic bullshit and support their community.
Try that at a Wal-Mart Express or a gimped up Target store.
I don't think the big stores like that can really succeed competing with the locals in a place like NYC. I would guess it's the same in other dense population centers like DC.
My hatred of them goes back to my youth and early online activism from when WalMart was pushing out local mom and pop record stores in small towns and replacing them with their shitty censored versions of music. (WalMart insisted that labels manufacture and sell censored copies just so they could push their twisted morals on America).
Needless to say, nothing they have done in the past twenty years has made them any more deserving of my dollars. I've never bought anything there and never will. Fortunately we live in an area of the country where it's easier to avoid them than it is to shop there, even if you wanted to.
How would Walmart put these stores out of business? Or do you mean consumers did by shopping at Walmart instead?
It's weird they would shop there instead.
WalMart shoppers vote with their dollars, and so do I.
A big part of it was selling stuff at a loss and getting around zoning rules by dropping stores in outlying areas outside of towns, extracting tax concessions in the process. As the GP mentioned, they were selective in stocking of books, CDs and other media. Lots of Jesus stuff and "family friendly" fare, which kept the local ministers and conservatives happy.
They also used their distribution as a weapon -- their market power let them cut national deals with big vendors like P&G and actually make them rent space on WalMart trucks.
Walmart would expand by building multiple stores in a region, surrounding denser communities. Doing that and exploiting those national accounts let them flood the region with goods, and kill the regional distributors that traditional discount stores and local stores depended on.
Once the competition is dead, prices float back up. We're all stuck with a shitty shopping experience and high prices. Now they use their dominant position to extract direct and indirect government subsidy on top of everything else. The company may be a triumph of some version of capitalism, but they are a cancer on society.
Are they "crushing both small local retailers and regional chains" or just competing with them? Would it have been better had they not competed?
And yes, Walmart drove hard bargains with their suppliers. Why not? They were offering those suppliers a ton of business. If the suppliers didn't like the deal, they didn't have to take it.
I just disagree that Walmart is a bad thing at all. Like I said, nobody is forced to shop there. If customers didn't like it, they could continue to shop at their mom-and-pop stores, but the important thing to note is they didn't.
Since the outcome of WalMart's success is duopoly between Target and WalMart, I would say that no, we're not better off.
This was a huge topic in the 90s, I'd suggest that you look at the many published descriptions of their business practices.
Are there many small businesses competing on these terms? If a service exists that allows me to save my time by not having to schlep myself to some store across town only to find that what I wanted is out of stock, or doesn't fit, or etc, then isn't it my prerogative to take advantage of it? Indeed, isn't the burden of proof on the companies that don't offer this to explain why I should shop there?
Amazon beats the competition on prices, selection, ease-of-use, logistics, and customer service, but I'm a bad person for buying from them? Oh let's not forget that the vast majority of mom-and-pop stores aren't offering insurance or benefits to their employees, selling mostly ethically sourced products (not saying Amazon does, just that most other people don't either), or finding ways to reduce their supply-chain footprint.
I'm not trying to say that Amazon is a saint, but let's not idealize everyone that isn't a huge corporation. People are people.
Reference to previous sudden closure in Pico Rivera in So. Cal.: http://ktla.com/2015/04/16/sudden-closure-of-pico-rivera-wal...