Wal-Mart, the biggest retailer in the world, is doing a rare pruning. The company is set to close down 269 stores, 154 of them in the U.S. alone. These U.S. locations will include all stores under what the company calls Wal-Mart Express. Its stores in Brazil also take up a big chunk of these shutdowns.
These store closures will not cause a big dent in Wal-Mart's revenues because they only represent less than one percent of its revenues worldwide. Currently, there are more than 11,000 Wal-Mart stores around the world.
However, these store shutdowns will still affect a total of 16,000 workers globally. About 10,000 of them are employed in U.S. stores. Still, this is just a small percentage of the more than 2.2 million people Wal-Mart employs just in the U.S. alone.
Along with these store closures, the company is also opening at least 405 new locations worldwide in its present fiscal year. This company initiative is in line with its shift towards Neighborhood Markets and Supercenters in more profitable locations.
The U.S. stores scheduled for closure are more of the size of dollar stores which the company is trying to operate since 2011. In 2014, they were rebranded as Neighborhood Market.
Interestingly, Wal-Mart will also close 23 existing Neighborhood Market in the United States, along with four Sam's Clubs and six discount centers. Wal-Mart will also shut down 12 Supercenters and seven locations in Puerto Rico.
Doug McMillon, Wal-Mart CEO, announced these store closures after he told investors that the company is reviewing its store operations. The goal, said McMillon, is for Wal-Mart to become more nimble considering the presence of more competitors attacking on all fronts, most especially Amazon.com, the largest online store in the world.
"No doubt our business has become both large and broad. It is more important now than ever that we evaluate our portfolio," explained McMillon. "We have closed stores across several markets and we will continue reviewing our fleet in a disciplined way," he added.
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