Wal-Mart Closing Half of Stores in Chicago due to Crime and Chaos

[Photo Credit: By Joe Goldberg from Seattle, WA, USA - walmart, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=92219558]

The number of Walmart sites in one of the biggest cities in the country will now reportedly be cut in half as a result of the closure of four stores in some of Chicago’s most crime ridden areas.

Walmart blamed the closures in Chicago on the city’s stores’ poor profitability, which has persisted since the first one debuted there 17 years ago.

On its February earnings call, Walmart issued a warning about potential budget cuts this year.

Executives provided a reduced prognosis for the upcoming quarter despite a successful holiday season.

The merchants observed that consumers are feeling the effects of inflation and are continuing to reduce their budgets for discretionary shopping.

Although official data suggests inflation has eased recently — prices jumped 5% in March, for example — expenses remain at historic highs. Total retail sales fell 0.4% last month.

Since that both businesses are seen as leading indicators of customer behavior, it is not surprise that some significant merchants are wary about 2023. The downtown San Francisco Whole Foods shop has closed.

According to Neil Saunders, managing director of the analytics firm GlobalData, retailers are evaluating performance on a store-by-store basis to determine which ones are profitable and estimate their growth potential.

He anticipates that this will go on for the remainder of the year.

In Chicago, one of the four stores shutting is a Supercenter, while the other three are Neighborhood Markets, which sell primarily groceries.

Walmart depends on customers making significant shopping visits since it operates at low margins.

Chicago had a rise in violent crime during the COVID-19 epidemic, with 797 murders in 2021 reaching a 25-year peak, however the number fell last year.

The Chicago Police Department reports that thus far in 2023 compared to 2022, thefts are up by 25% and robberies are up by 11%.

Walmart recently shuttered numerous locations in Portland, Oregon, apparently due to general profitability, only days before Chicago.

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