Walmart recently announced that it will be closing 154 stores in the United States as well as an additional 115 stores internationally, and people are ticked. Among the stores closing are all 102 of Walmart’s recently implemented “express” stores, which came into the world about five years ago in an attempt to compete with small town dollar stores. The company is citing several reasons for its decision to close so many stores at once, the main two being that it wants to focus on neighborhood markets and e-commerce more diligently. The express stores apparently did not go over too well and ended up functioning a little more like local markets than the executives at Walmart anticipated, and did not bring in as much of a profit as expected.
So, what problems are the mass exodus of Walmarts causing?
Food Deserts
One of the biggest issues that the affected small towns anticipate is that the disappearance of Walmarts will cause a growth in food deserts in rural and impoverished areas. The USDA defines food deserts as low-access communities where “at least 500 people and/or at least 33 percent of the census tract’s population must reside more than one mile from a supermarket or large grocery store.” According to the Associated Press, the closures will lead to the creation of three new food deserts. Without Walmart, residents will be stripped of access to fresh produce, meats, and all kinds of other foods. In some cases, it may even become risky to get to the closest grocery store, as the people may need to travel across highly trafficked highways just to get food.
Another concern for locals is the fact that, without competition from other vendors, some stores may start to raise prices, making healthy foods even more unaffordable. Walmart is pulling its express stores out of some of the poorest neighborhoods in America, exacerbating problems with unhealthy eating and a lack of access to proper nutrition that millions of Americans already face.
Small Town Chaos
Since the arrival of these Walmarts in the first place, many complained that the stores would take away business from local stores. Tons of self-proclaimed mom and pop shops were forced out of business when they couldn’t compete with Walmart’s “everyday low prices.” But, after dealing with the initial trouble that came with big business growing in a small town, some local business owners began to work at the Walmart stores or, at the very least, became reliant on the presence of the stores to buy their everyday items. Now that Walmart stores announced their departure, small town residents are terrified of what the results could be, claiming that it will almost definitely have a negative effect on town revenue. Some small store owners are even exploring legal options to receive the compensation they feel they deserve for being slighted in the first place.
Unemployment
Of course, possibly the most obvious effect of these closures will be the loss of jobs for around 16,000 employees, 10,000 of whom are people working in the United States. The company has announced that some employees will be transferred to other branches, which, although a nice sentiment, may be difficult for those with limited access to transportation or multiple jobs. Walmart also promised to give all employees who are not transferred 60 days of pay after their last day of work–which will be this coming Thursday–and severance if they are eligible.
Walmart has been in the news recently thanks to criticism from disgruntled employees and consumers who have drawn attention to the company’s low wages. Its average employee, even after the recent wage increases, still gets paid more than a dollar below the average U.S. retail worker. Even though Walmart has been working to increase its employees’ paychecks, it simultaneously began cutting hours and closing stores, making higher wages kind of a moot point.
Remedying the problem
Walmart executives responded to criticism by citing the large impact Walmart has in comparison to the small number of stores that are closing–the company claims the economic impacts of these closings will be minimal. Doug McMillan, CEO of Walmart Stores, released a statement on the company’s website saying,
The decision to close stores is difficult and we care about the associates who will be impacted. We invested considerable time assessing our stores and clubs and don’t take this lightly. We are supporting those impacted with extra pay and support, and we will take all appropriate steps to ensure they are treated well.
Walmart also plans to open around 300 new stores worldwide next year. Executives say they are still committed to growing the company and fighting food deserts, but need to make sure they are doing it in a way that is disciplined and will best protect the company for years to come.
It is unfortunate that local communities that have adapted to the arrival of the big business will now have to rearrange their lives around its quick disappearance. Walmart claims to be committed to helping its employees and those who have lost jobs because of this decision, but that word may not mean much after the recent series of cutbacks and layoffs, which were supposedly made in the name of raising wages.
Whatever the future may hold, many small town residents are not happy with how they’ve been jerked around by big businesses like Walmart over past several years–in some cases, the company could be ruining people’s lives.
Walmart could be losing a lot of loyal customers with these store closures, but, quite frankly, its astronomically high yearly profits probably won’t suffer all that much.