Walmart has announced that it intends to shut four of its eight stores in the Chicago area, citing disappointing customer traffic and significant financial losses. The yearly losses incurred by the four retail outlets that are being closed amount to tens of millions of dollars. The annual losses have more than quadrupled over the course of the previous five years. Despite the efforts that have been made by the company to make things better, fundamental business challenges still exist.
Chicago’s South and West regions, where the people from the marginalized communities reside, would soon lose three local Walmart stores. Given that these communities do not have much exposure to retail outlets and grocery stores, the abrupt closure of three Walmart stores would have a significant impact on their lives.
Walmart’s decision to pull back its stores from the Chicago region seems in line with its bold move to cut down the outlet count located in a total of 12 states and districts of Columbia. However, Walmart has extended its support to employees who would lose their current jobs. In a blog post, Walmart agreed to reposition the affected staff to some outlets located in different regions. Moreover, Walmart is looking forward to working with the local authorities to innovatively repurpose the empty store space.
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It has not been too long since Walmart closed the doors of the two remaining outlets in Portland, Oregon. Both of these stores were located on SW Salmon Street. Walmart’s constantly downgrading performance and record-breaking retail theft significantly impacted the company’s financial performance, which ensued in shutting down the stores.
Walmart’s hard decision to close down its outlets in the Chicago region is the epitome of how the global slowdown and difficult operating environment are severely affecting retailers. Walmart’s effort to provide economically disadvantaged communities with access to low-cost retail and food options ultimately proved to be unsustainable as a result of the financial losses that it was incurring.
While is undoubtedly a disheartening action for the marginalized communities in the Chicago region, Walmart had to take this unskippable decision to save itself from hefty financial losses. It is reassuring to know that the company is making efforts to assist its employees and is working with representatives from the local authority to repurpose the building so that it may be used for other purposes in the future. We can only hope that this will make the impact of the retail closings in the area a little less severe.
