We may only be three weeks into the new year, but many retailers are already thinking about how to shore up their profits for the upcoming fiscal 2024 year.
The year 2023 was plagued by store closures and bankruptcies, and many of the remaining retailers are already closely evaluating the coming year for potential weaknesses, difficulties and obstacles.
Related: Costco Shoppers Buy Cheap Products for a Popular $1,200 Luxury Item
Take, for example, the state of pharmacies last year. CVS (CVS) – Get a free reportRite Aid and Walgreens (AMB) – Get a free report They closed hundreds of stores across the country in underperforming areas and even more were forced to lock up merchandise that was a frequent target of theft.
However, others fought bankruptcy. Filings in the US hit a 13-year high in 2023, with 50 stores filing for bankruptcy in December 2023 alone. March saw the most in 2023, with 67.
It didn't matter if you were in the home products segment like Bed Bath & Beyond (BBBY) – Get a free report or the real estate corner like WeWork (BOWX) – Get a free reportHowever, if you didn't care about your merchandise and keep a close eye on inefficiencies, you probably weren't safe.
Even giants that previously seemed impervious to recessions, like Amazon (AMZN) – Get a free report and Walmart (WMT) – Get a free report, were forced to take a closer look at their results and make some difficult decisions. In the case of Amazon, this meant a slow trickle of employee layoffs. And for Walmart, it meant making the shocking decision to close some stores.
Upcoming Walmart Store Closings in 2024
Closing stores can be a difficult decision no matter the retailer, but Walmart's proximity to the majority of the American population has always been a bright spot on its resume. This can make store closures especially painful not only for Walmart and its bottom line, but also for the people who rely heavily on it for everything from groceries to household essentials.
In 2023, Walmart will close 24 stores in total, up from 15 originally scheduled. These closures affected 14 states and Washington, DC, with four stores closing in Chicago and eight across the state of Illinois, the most of any state.
For the most part, Walmart attributed poor performance and theft as the central reasons for the closures.
“These stores lose tens of millions of dollars a year, and their annual losses have nearly doubled in the last five years alone,” Walmart said in a news release, adding: “We have invested hundreds of millions of dollars in the city ( of Chicago) )… These investments were expected to help improve the performance of our stores. Unfortunately, these efforts have not materially improved the fundamental business challenges facing our stores.”
Now, Walmart will continue its path of closures through 2024.
For now, the retailer only plans to close two locations in the state of California. They are:
- Walmart Neighborhood Market on Imperial Avenue, San Diego
- Walmart on Fletcher Parkway, El Cajon
The main reason cited for the closures was that Walmart was unable to reach an agreement on lease terms with the owners of the space. Both locations are expected to close on February 9, 2024 and affected employees will be relocated elsewhere within the company.
