Walmart shuts four stores in Chicago – halving its footprint in Illinois city

Walmart shuts four stores in Chicago – halving its footprint in Illinois city

Introduction

Walmart has announced the closure of four stores in Chicago, a move that will reduce its presence in the city by half. The decision comes as these stores have been facing significant financial losses for several years. Despite efforts to turn them around, the stores have not been profitable since the opening of the first one nearly 17 years ago. The annual losses of these stores have nearly doubled in the past five years, totaling tens of millions of dollars. These closures are part of a larger trend, as Walmart has already shut down 11 other stores across the country this year. The decision has attracted attention, with some attributing the ongoing losses to the high crime rates in the areas where these stores are located.

Financial Struggles and Closing Decisions

According to a statement released by Walmart, the four stores in Chicago have been facing financial difficulties for an extended period. Despite various attempts to improve their performance, including turning them around, the stores have consistently failed to generate profits. Walmart did not provide specific reasons for the ongoing losses in these stores, but some social media users have pointed to the high crime rates in the surrounding areas as a possible contributing factor.

The decision to close these stores was not taken lightly by Walmart. The company acknowledged the impact it would have on the employees, customers, and communities near these stores. Walmart is offering its employees the opportunity to transfer to other locations in the coming weeks.

These closures are not limited to Chicago, as Walmart has been shutting down stores in various locations across the United States. The company has closed stores in Portland, Oregon, due to overall profitability concerns. Additional closures are expected in Washington, Minnesota, Wisconsin, Indiana, Florida, Hawaii, New Mexico, and Arkansas. Walmart’s recent announcement of cutting over 2,000 warehouse jobs further reflects its efforts to address financial challenges.

Chicago’s Crime Rates and Impact

The closure of these stores in Chicago comes shortly after the city’s newly elected mayor, Brandon Johnson, blamed businesses that do not pay taxes for the city’s poverty and crime rates. Johnson proposed heavily taxing corporations and wealthier residents to raise funds for the city’s residents and neighborhoods. The mayor believes that poverty rates and mental health issues are root causes of crime and violence in the city.

Chicago has been grappling with high crime rates, with thefts increasing by 25 percent and robberies up by 11 percent in 2023 compared to the previous year. Walmart CEO Doug McMillon had previously warned about the impact of theft on stores nationwide, which could lead to additional closures.

Municipal Priorities and Challenges

Mayor Johnson faces significant challenges in addressing various issues in Chicago. Apart from tackling high crime rates, he is focused on addressing homelessness, which has worsened during the COVID-19 pandemic. Homeless encampments have emerged within O’Hare International Airport, raising concerns about traveler safety.

Johnson plans to promote 200 new detectives from the existing pool of police officers to strengthen police accountability and combat crime. Additionally, he aims to address the struggling public school system, the city’s fiscal woes, and the aftermath of the pandemic, which led to the closure of many businesses and offices.

Impact on Chicago’s Business Landscape

The closure of Walmart stores and the departure of high-profile residents and businesses, such as Ken Griffin, Illinois’ former richest man, have raised concerns about Chicago’s business landscape. Griffin relocated his billion-dollar firms, Citadel and Citadel Securities, to Florida in 2022.

Conclusion

Walmart’s decision to close four stores in Chicago reflects the ongoing financial struggles faced by these locations. The company’s statement emphasizes the difficulties in turning around the stores, which have been consistently unprofitable since their opening. The closures are part of a broader trend, with Walmart shutting down stores in multiple locations across the United States. The impact of high crime rates and other challenges faced by the city of Chicago further complicate the situation. Mayor Johnson’s plans to address poverty, mental health issues, and homelessness, along with his focus on strengthening the police force, aim to address the root causes of crime and violence in the city. However, the closure of Walmart stores and the departure of prominent businesses raise concerns about Chicago’s business landscape and underline the need for comprehensive solutions to the city’s challenges.