Walmart Discreetly Shut Down 101 Locations Last Year

Walmart celebrated a great year last year with strong performance across almost every area of its business, and this year also looks to be a big one for the retail giant. However, in Tuesday’s earnings report, it was revealed that the figure for the number of stores across the nation was significantly smaller than the year before.

According to Walmart’s investor website, the giant quietly reduced its number of stores by 101 between January and August last year. Specifically, the retailer closed “22 supercenters, stores, and neighborhood markets” because their financial performance didn’t meet expectations, per a spokesperson. The other locations, 79 small-format stores, were not reduced “due to closure per se, but the sale of the Moosejaw and Bonobos brands,” according to Walmart.

Despite this, the year ahead is planned to be a big one for Walmart because it will launch an expansion plan that will see 150 new or upsized Walmart locations over the next five years.

With the bigger plans that Walmart has in store over the next few years, closing down smaller locations makes sense according to analysts. Speaking to Business Insider, analysts said that closing down stores that were underperforming and pivoting away from unsuccessful formats are both smart decisions for a company that wants to keep its healthy financial state.

Scot Ciccarelli, managing director and senior equity research analyst at Truist Securities, said that Walmart under CEO Doug McMillon has shown the ability to keep an open mind and test out different retailing ideas, to change direction if they don’t do well, and to reinvest the savings in other areas of the business.

Regarding closing down the stores, Ciccarelli said, “It’s a repositioning more than anything, and good retailers are going to do the same with their store portfolio.”

GlobalData retail analyst Neil Saunders explained that small stores just weren’t working for Walmart.”Walmart has always struggled with smaller stores,” he said. “Partly because they don’t really know what to put in them — it’s not really what Walmart is known for and the economics are much more challenging.”