Walmart is closing stores in numerous states (refer to the list)

Even wildly successful chains close stores.

Most of the largest retailers and restaurant operators let leases expire or simply close underperforming locations. This can be due to population shifts, changing demographics in a market, or a more nefarious reason, such as excessive theft.

During Walmart’s fourth-quarter earnings call, CEO Doug McMillon stated unequivocally that the company was in good health.

“As we review our quarterly and annual results, we are pleased to see, first, a healthy top line. We are improving our ability to serve people the way they want to be served in the moment. “That is what is driving our growth,” he explained.

The CEO believes that customers have been drawn to Walmart (WMT) due to inflation and rising prices elsewhere.

“We have low prices and are becoming more convenient. Customers are shopping with us more frequently and purchasing more items, including in general merchandise categories, which increased by low single digits in Walmart U.S. and Sam’s U.S. for the quarter,” he added.

Walmart customers may not like this

During these financially uncertain times, many retailers, including Costco, a key Walmart competitor, have boasted about cutting margins to help customers. That is not what Walmart is doing.

“We are growing profit faster than sales, and we have runway to scale our higher-margin businesses like membership, marketplace, and advertising,” said the CEO.

McMillon emphasizes that this does not imply that the chain has raised prices.

“We are mixing ourselves up, while simultaneously investing in lower prices and associate wages,” said the manager.

Essentially, the company is maximizing profits where possible rather than returning even more of them to its customers. That is something that many businesses do without being quite so open about it.

The CEO did make it clear that Walmart makes a concerted effort to lower prices.

“As always, we are working hard to help reduce prices. Last year, Walmart U.S. had over 22,000 rollbacks. “We are wired to help people save money and live better,” he explained.

Walmart has also worked to expand and improve its merchandise.

“The work we are doing to expand our assortment is another factor driving our growth, as more customers find what they are looking for. In addition to low prices and a growing selection, we prioritize delivery speed and accuracy,” he explained.

McMillion seemed particularly proud of his chain’s breadth of offerings and ability to deliver items to customers.

“If I could change anything about how we are perceived today, it would be that more people know about our breadth of assortment online and our increasing delivery speed,” he told me.

Walmart is closing stores

Despite its success and plans to open over 100 new locations by 2025, Walmart intends to close a number of stores. The closures are permanent, according to the company.

These Walmart stores are closing:

• Georgia: Dunwoody (Ashford Dunwoody Road) and Marietta (Roswell Road) locations.
• Maryland: Towson store (Putty Hill Ave.).
• Ohio: Columbus store (S. High St.).
• Wisconsin: Milwaukee branch (W. Main St.).
• Colorado: Aurora location (E. Colfax Ave.).
• California: Closures are expected in San Diego, El Cajon, West Covina, Fremont, and Granite Bay by 2025.

“Walmart officials say the closures are part of an effort to improve store performance, with a focus on locations with higher customer traffic and profits. According to media reports, these strategic adjustments are intended to better meet the needs of their customers.

During the earnings call, CFO John David Rainey emphasized that these closures are unrelated to the company’s health.

Let us start with the headline. Walmart had another strong quarter, exceeding our sales, profit, and earnings expectations. This performance reflects the strength of our business model and the hard work of our associates worldwide,” he said.

The chain, he added, remains committed to its dual missions.

“Our focus remains on providing value to customers and members while driving long-term growth for shareholders.” Customers continue to respond to our value proposition, which includes lower prices, a broader assortment, and greater convenience. “We are earning their trust and increasing our market share as a result of improved customer experience,” he said.

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