Is Walmart Closing Stores In 2026? (Not What You Think)

Hey there,

If you‘ve been following the latest retail news, you may have seen headlines about Walmart closing stores in 2022. As a Walmart shopper yourself, you might be wondering what‘s going on and if your local store is impacted. I‘ve dug into the details and have the inside scoop for you!

Is Walmart closing stores in 2022?

The short answer is yes, Walmart is closing some stores across the U.S. and Canada this year. However, it‘s nowhere near the mass shutdowns that some rumors would have you believe.

Here are the key facts:

• Walmart plans to close around 20 total stores in the U.S. in 2022.

• This represents only 0.5% of their nearly 4,700 stores nationwide.

• Additional closures are happening in Canada – around 6 stores total for the year.

• Meanwhile, Walmart will still open dozens of new stores in 2022 to expand into growth markets.

So ultimately, while Walmart is shuttering a select number of locations, they still plan to maintain a strong brick-and-mortar presence in North America and globally. The closures are strategic, not a sign of trouble.

Why is Walmart closing any stores at all?

As the world‘s largest retailer, Walmart has to stay ahead of changing market conditions and consumer shopping habits. The company has identified several key reasons to close stores:

• Over-stored markets: Some areas have too many Walmart locations built close together. Consolidating provides cost savings.

• Shift to e-commerce: Online shopping requires less real estate, so Walmart can reduce physical stores.

• Focus on supercenters: Closing smaller formats to focus expansion on ~180k sq ft supercenters with full assortment.

• Unprofitable stores: Closing consistently underperforming stores improves overall performance.

• Employee restructuring: Reducing 24-hour staffing and checkout personnel saves on labor costs.

Here‘s a more detailed look at each of these strategic reasons:

Over-stored markets

During Walmart‘s massive growth phase in the 1990s and 2000s, they built stores ubiquitously, sometimes having multiple locations within a 15 minute drive. various sources estimate Walmart has saturated the U.S. with around 1.5 stores per 100,000 residents.

But today, having too many physical stores in close proximity leads to competing sales and duplicated overhead costs. It‘s no longer financially optimal. Consolidating allows Walmart to choose one higher performing "hub" store per market area while closing the lower volume duplicates around it. This rightsizes their footprint.

Shift to e-commerce

Online shopping has boomed over the past few years. Walmart‘s e-commerce sales alone grew 79% in 2021, reaching $73 billion annually. Catering to this shift in consumer preferences requires massive investment in digital infrastructure – from websites to apps, fulfillment centers and delivery logistics.

Closing physical stores provides capital to fund Walmart‘s e-commerce expansion and tech upgrades. For example, Walmart recently opened four new high-tech fulfillment centers in 2021 to enable faster delivery. The optimal balance is now fewer brick-and-mortar outlets integrated with robust nationwide e-commerce capabilities.

Focus on supercenters

Bigger has proven to be better when it comes to Walmart‘s store formats. The massive supercenter model combining full-line grocery and general merchandise generates significantly higher sales compared to smaller community market, express or discount store formats.

Per Walmart‘s 2021 annual report, supercenters average about $90 million in annual sales each, while discount stores average around $31 million. Supercenters also offer consumers one-stop convenience for everything from produce to power tools.

By phasing out underperforming smaller formats, Walmart can focus expansion plans and resources on the higher revenue supercenter model. New supercenters also incorporate the latest retail tech for omnichannel integration.

Unprofitable stores

Walmart routinely reviews the financials of every store to identify low performers that may need repositioning or closure. If sales, traffic and profitability metrics underperform over time, it makes smart business sense to consolidate locations.

Some regions especially at risk include rural areas and lower income neighborhoods. Population declines or demographic shifts can diminish sales potential. For example, Walmart closed numerous locations in Appalachia and the deep South where stores became unprofitable.

Underperforming urban stores also tend to be small format stores that suffer from low sales and theft – two issues Walmart corrects by shuttering the location.

Employee restructuring

To optimize labor costs, Walmart has been reducing 24-hour staffing models in favor of daytime-only restocking. They‘ve also scaled back staffing of in-store pharmacy and checkout areas in locations where transaction volume is lower.

Adding more self-checkout improves checkout efficiency while eliminating some cashier roles. While controversial, this aligns staffing levels with store needs and helps manage Walmart‘s rising labor costs as wages increase.

What happens when Walmart closes a store?

The process Walmart uses when closing a retail location is actually quite structured and gradual. It aims to sell off assets and transition employees smoothly.

Here are the typical steps:

• Employees are given 60-90 days of notice before a store closure.

• Liquidation sales run for 1-2 months, discounting merchandise until inventory sells out.

• Fixtures, furniture and equipment are also sold off where possible.

• Employees are either transferred to nearby Walmart stores or laid off with severance pay.

• Real estate assets like leased buildings may be sublet to other retailers if feasible.

• Walmart aims to mitigate financial losses from store closures through liquidations.

• Timeframe from closure announcement to doors shutting is usually 2-6 months.

What about your local Walmart?

If you‘ve got a favorite neighborhood Walmart store, you may be wondering if it could be on the chopping block.

Here are some tips to check if your store seems risky:

• Look for limited operating hours or constantly empty shelves/understaffing – signs of winding down.

• Check Walmart‘s website for posted lists of regional closures.

• Monitor local news and town Facebook groups for rumors of closures.

• Ask employees about potential renovations or performance issues.

• Consider proximity to other Walmarts – they won‘t close the only store in 20 miles but may cut duplicate locations.

• Think about area growth and demographics – declining towns more at risk than booming suburbs.

If your store does end up on the closure list, all hope isn‘t lost. Reach out to your local manager about improving sales or staffing levels to meet community needs. Engaged customers and employees can potentially reverse closure plans if there‘s a good case to stay open.

What does this mean for Walmart‘s future overall?

While the media makes it seem like Walmart is collapsing, brick-and-mortar retail is far from dead. The closures happening are part of a strategic realignment, not a retreat.

Looking ahead, here‘s what we can expect:

• Gradual closure of around 10-20 stores annually will continue over the next 5+ years.

• Total U.S. store count will decrease slightly as poor performers are consolidated.

• Supercenters will remain the priority model for new store openings and expansions.

• E-commerce capabilities will continue to grow as investment priority.

• More distribution centers and fulfillment infrastructure will open to enable online orders.

• Walmart‘s physical presence will remain solid in both urban and rural markets with customized approaches.

• Top-tier suburban markets will see the most supercenter expansion and renovation.

• Walmart will retain #1 spot as world‘s largest retailer by strategically adapting to market changes.

The key takeaway? Walmart isn‘t abandoning physical retail. They are optimizing. Although your specific local store may close, the Walmart brand is simply evolving to offer omnichannel convenience. So don‘t panic about doomsday headlines – Walmart will continue delivering value and selection for decades to come.

I hope this overview gives you insider clarity about Walmart‘s strategic position. Let me know if you have any other questions!