Retail giant Walmart announced on Tuesday that it will close four of its Chicago stores due to them being part of a group of locations that "lose tens of millions of dollars a year." The stores that will shut this upcoming Sunday are the Chatham Supercenter, the Walmart Health center, and the Walmart Academy at 8431 S. Stewart Ave., the Kenwood Neighborhood Market at 4720 S. Cottage Grove Ave., the Lakeview Neighborhood Market at 2844 N. Broadway St. and the Little Village Neighborhood Market at 2551 W. Cermak Road.
Walmart stated that collectively, their Chicago stores have not been profitable since they opened the first one nearly 17 years ago, with their annual losses nearly doubling in the last five years. Over the years, the company has tried various strategies to improve the stores' performance, such as building smaller stores, localizing product assortment, and offering services beyond traditional retail. Walmart has invested hundreds of millions of dollars in the city, including $70 million in the last few years to upgrade stores and build two new Walmart Health facilities and a Walmart Academy training center.
However, despite these efforts, the business challenges the stores faced have not been materially improved. Therefore, Walmart believes that closing the four stores will give the remaining four stores the best chance to help keep them open and serving the community. Walmart said it hopes to repurpose the buildings it’s leaving behind so they remain "important parts of their communities."
Walmart will pay affected staff until August 11, 2023, unless they transfer to another store. After that date, those eligible will receive severance benefits. The company stated that those employed by the stores that are soon set to close are now eligible to transfer to work at other Walmart locations. Hiring managers from surrounding facilities will be in each of these stores this week to help associates begin finding their next opportunity.
The announcement of the store closures was met with a mixed reaction from Chicagoans, with some lamenting the loss of jobs and affordable grocery options in the affected areas. The closures also raise concerns about the impact on the communities' access to healthcare, as two of the stores include Walmart Health centers. Walmart Health offers primary care, dental, and mental health services at low prices, with some patients paying as little as $4 for a medical visit.
While Walmart stated that it hopes to repurpose the buildings left behind, the loss of the Walmart Health centers is a significant blow to the community's access to affordable healthcare. Walmart Health centers have been part of Walmart's broader efforts to expand its business beyond retail, and the centers have been successful in attracting patients who may not have otherwise sought out medical care.
The decision to close the stores is part of a larger trend of retailers closing underperforming stores, accelerated by the recent COVID-19 pandemic. The pandemic has accelerated the shift towards online shopping, leading to declining foot traffic in physical stores. However, Walmart's decision to close its Chicago stores was not entirely unexpected, as the stores have struggled to turn a profit for years.
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