Tag Archives: Walmart

Closing Walmart and Whole Foods locations and their responsibilities to urban neighborhoods

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Walmart announced yesterday it is closing four locations in Chicago:

Photo by Evgeni Lazarev on Pexels.com

The simplest explanation is that collectively our Chicago stores have not been profitable since we opened the first one nearly 17 years ago – these stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years. The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serving the community.

Over the years, we have tried many different strategies to improve the business performance of these locations, including building smaller stores, localizing product assortment and offering services beyond traditional retail. We have invested hundreds of millions of dollars in the city, including $70 million in the last couple years to upgrade our stores and build two new Walmart Health facilities and a Walmart Academy training center.

It was hoped that these investments would help improve our stores’ performance. Unfortunately, these efforts have not materially improved the fundamental business challenges our stores are facing.

Chicago officials decried the closures:

Nedra Sims Fears, executive director of the Greater Chatham Initiative, said the closure of the store and health center in Chatham was “deeply disappointing.”…

“All communities in Chicago should have access to essential goods and services,” Lightfoot said in the statement. “That is why I’m incredibly disappointed that Walmart, a strong partner in the past, has announced the closing of several locations throughout the South and West sides of the City. Unceremoniously abandoning these neighborhoods will create barriers to basic needs for thousands of residents.”…

In a statement, Mayor-elect Brandon Johnson said his administration “will be committed to identifying ways to fill the gaps these closures will leave in neighborhoods, and also to finding other ways to ensure families have direct access to groceries in their communities.”

Ald. Sophia King, 4th, and Ald. Jason Ervin, 28th, whose wards include locations slated to close, both called the closures disappointing in statements Tuesday. “The west and south sides need committed partners to reverse decades of disinvestment and discrimination, and I hope Walmart will work hard to invest in the communities in Chicago that desperately need their presence,” Ervin said.

In San Francisco, a Whole Foods that opened downtown in 2022 closed earlier this week:

Whole Foods Market opened a new “flagship” branch Downtown, at Eighth and Market near the Trinity Place development, with much fanfare in March 2022. But just 13 months on, the supermarket chain has decided to close the store, which was shuttered at the end of business on Monday.

Residents and leaders expressed disappointment:

News of the store’s closure also sparked dismay online. Residents on Twitter described losing the supermarket as “disappointing,” and “disheartening,” while one warned: “As whole foods goes, so goes the neighborhood.”

The Whole Foods Market fell within the district of San Francisco District 6 Supervisor Matt Dorsey, who posted a thread about its closure on Twitter on Monday.

“I’m incredibly disappointed but sadly unsurprised by the temporary closure of Mid-Market’s Whole Foods,” he wrote. “Our neighborhood waited a long time for this supermarket, but we’re also well aware of problems they’ve experienced with drug-related retail theft, adjacent drug markets, and the many safety issues related to them.”

Residents of all communities need access to food. Certain neighborhoods are invested in less than others. A sizable grocery store can help anchor other business activity. Filling a vacant large commercial space can be difficult.

If a company says it cannot keep a store open – the two companies give different reasons above – what reasons might be acceptable to a community?

I would hope retailers and corporations want to go beyond just making money in a location. At the least, as corporations and politicians often remind us, they provide jobs. But, they can also be much more.

Finding the mean, median, and modal Walmart shopper

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An analytics firm describes the “typical” Walmart shopper:

Photo by Michael Burrows on Pexels.com

Numerator found that Walmart’s typical shopper in the US is a white woman between 55 and 64 years old, who is married and living in the suburbs of the Southeast. She typically has an undergraduate degree and earns about $80,000 per year.

She visits Walmart at least once per week — about 63 trips per year — and picks up 13 products for a total cost of about $54 per trip. 13.5% of her spending takes place at Walmart, while she spends about 11% at Amazon.

Her primary shopping categories in-store are groceries, including chicken, fruit, snacks and sweets, but she also gets a lot of fast food. Her favorite five brands at Walmart are Turkey Knob, Cheetos, Betty Crocker, Dole, and Tyson.

I am always looking for examples to help illustrate the differences between the three primary measures of central tendency: mean, median, and mode. When an article or report says something is “typical,” what exactly do they mean? Here is my guess at which data above is which measure of central tendency:

-mean: age, education level, visits to Walmart, money spent per trip

-median: income

-mode: race/ethnicity, marital status, place of residence, what is purchased

Some of these are harder to guess or do not fit these three options well. For example, is the $54 per visit a mean or median? Or, the five favorite brands are not a singular mode and they may lead the list of brands but not actually comprise that much of the total percent of purchases.

Additionally, it would be interesting to add measures of variability. How much variation is there in the age and education level of Walmart shoppers? I would guess the company wants to know more about the $54 spent per trip; how many spend more and what could be done to increase the number of people who spend more? Throw in a standard deviation or some other measure of dispersion and the numbers above become much more interesting.

In the end, the report above does not mean that someone visiting a Walmart will find most shoppers fit that profile. The measures of central tendency here tell us something but using multiple measures plus some measures of variability would provide more in terms of revealing who is at Walmart.

Walmart and Crate & Barrel feature the same designer but different products, aesthetics, audiences

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Two advertisements, both featuring designer Leanne Ford, recently arrived on the same day in my mailbox. I did not expect that Crate & Barrel and Walmart would both feature the same person:

I wonder about a few things:

  1. What is the overlap of consumers/audience between these two stores? Perhaps there is more overlap than I think.
  2. While each advertisement features the same designer, there are noticeable differences. For Crate & Barrel, Ford is adding to the modernist style. For Walmart, she and her husband are providing tools to tackle home projects. The first is leaning more towards art, the second is leaning toward getting things done. Even how it is presented is clearly different.
  3. Having some familiarity with both retailers, my sense is that both do not often use famous names to sell products. In contrast, a retailer like Target has tried this a number of times. Does this signal a new approach for both retailers? If so, it is interesting that both think Ford will help them appeal to potential customers.
  4. Just thinking out loud about more consonant pairings: Walmart and Ikea? Target and Crate & Barrel?
  5. I cannot help but think about Bourdieu in this context. The idea of home design has grown in recent decades in the United States and the concept and its purveyors – such as HGTV – are broadly available. Yet, how exactly this plays out in different class contexts can vary. Design for middle to upper-class residents means something different than design for lower to middle-class residents.

Trying to make a better Walmart parking lot experience

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I have driven through many Walmart parking lots and while doing this, I often wonder how a better parking lot experience could help avoid regular issues. Here are some of the big concerns:

  1. There are often a lot of vehicles, people, and carts moving around. It is hard to keep track of all the activity.
  2. Depending on the traffic flow of the location, some of the traffic can be routed right in front of the store as vehicles turn in from a street or adjoining parking lot.
  3. At least a few cars always seem to be lingering right at the front doors or nearby, waiting for people.
  4. Carts are strewn throughout the parking lot; most are in corrals but there are often other ones on medians, in parking spots, and even several parking lots over. (Imagine if the Walmart lot had Costco sized shopping carts!)

A few solutions come to mind:

  1. Everyone needs to be very attentive. Having to pay close attention is not necessarily bad for drivers or pedestrians.
  2. It is better to have the majority of drivers enter the parking lot area from the back rather than from the sides and drive directly in front of the store.

I started thinking about this recently after realizing that I have been in multiple parking garages at Target locations but never at a Walmart. In these locations, there are advantages to having the parking further away from the store and/or having the store on a different level from the traffic flows.

Figuring this out could have multiple benefits including: drivers and pedestrians would feel safer, the parking lot experience could be less fraught and more pleasant, and fewer work hours might need to be devoted to the parking lot.

Perhaps this is just the price Americans are willing to pay for their love of driving and sprawl: complicated parking lots. This is not an issue exclusive to Walmart as many big box stores demonstrate similar patterns. But, since Walmart has so many locations and so many customers, solving issues there could be a big deal.

Looking deeper at Wheaton, Illinois in Walmart’s “United Towns” ad

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During the Super Bowl, Walmart ran an ad titled “United Towns.” From roughly 0:10-0:12, there is a a shot of Wheaton, Illinois looking south on Main Street. Here is the view:

WheatonWalmart2020

Four things of note from this short appearance of Wheaton in a national ad:

  1. As a number of Wheaton residents noted online, there is no Walmart in Wheaton. This is true but it obscures the larger story. One, how many Wheaton residents shop at Walmart (there are two within several miles of the town’s borders) as opposed to other big box stores (such as the Target in Wheaton or the several within a few miles)? Or, how many Walmart employees live in Wheaton? Two, there may be reasons Wheaton has no Walmart: it might not have wanted one. The busy stretch along Roosevelt Road is carefully controlled by the city – no big box stores. The largest shopping area, Danada, does not have any big box stores (though it now has three sizable grocery stores). Wheaton had one of the first Target stores in the area but it is located right on the edge of town and a proposed Home Depot across the street did not get approval and is now just past Wheaton’s northern border.
  2. The image captures a feature of Wheaton life: the passing of trains through the downtown and the community. Without the train line, there is no Wheaton (at least the one officially founded in the 1850s). The train may be a fact of life in Wheaton and numerous other American communities but it is not necessarily a welcome one since these trains can delay traffic.
  3. The ad on the whole promotes the ideas of small towns and community life. There are lots of shots of houses and older downtown buildings. But, is Walmart both a rural/small town as well as a suburban phenomenon? Without suburban stores – meaning Walmart locations along main roads, within sprawl, and dependent on driving – Walmart is not the company it is today. Like many Americans, Walmart might promote the ideal of small towns but not really live in that world.
  4. Connected to #3, the shot of a cute or quaint suburban downtown is an interesting contrast to the effect of Walmart in the American economy plus the larger changes in which they participated. Wheaton’s downtown is in okay shape but imagine what it could be without big box stores. More broadly, downtowns across the country pursued different options to counter the changes in retail and shopping in the postwar era (starting with shopping malls and strip malls and later extending to big box stores).

Seeing the real America at the ER Saturday at 10 PM and Walmart Sunday at 8 PM

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I visited both of these locations in recent weeks and was intrigued to see the mix of people at each. I’ll make a quick case for why these locations could provide as good cross-section of America as any other location:

  1. Limited options. For the emergency room on a Saturday night, there are few other medical options available at that time. If anyone has a medical issue, they will end up here. As for Walmart on Sunday evening, there are limited brick and mortar shopping options and the work week is about to start.
  2. People need medical care and grocery/home items. Both locations have people trying to meet basic human needs. Even as online shopping may allow people to avoid other shoppers and online medical consultations are now available, there are inevitably moments where running out to a store or medical professional is necessary. It is hard to imagine either of these facilities disappearing completely (even if the number of retailers is severely reduced).
  3. Connected to #1 and #2 above, people of differences races, ethnicities, and social classes are at both locations. In many other locations, whether due to residential location, the location of jobs, ill will toward others, or access to resources, not all groups are represented. Sociologist Elijah Anderson wrote a book about such rare urban locations.

While these may not be the best locations in which to conduct research, they could offer insights into typical American life.

Can you be opposed to Walmart in your community but not Amazon?

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Alana Semuels compares the fight of Greenfield, Massachusetts and other New England towns against Walmart and other big box stores to a struggle with shopping on Amazon. The story begins and ends with an activist who led the fight in Greenfield against Walmart:

Al Norman has been fighting to keep Walmart and other big-box retailers out of small towns like this one for 25 years. He’s been successful in Greenfield, his hometown and the site of his first battle with Walmart, and in dozens of other towns across the country—victories he documents on his website Sprawl-Busters, an “International Clearinghouse on Big Box Anti-Sprawl Information.” Partly because of Norman’s efforts to keep out such stores, Greenfield still has a Main Street with dozens of businesses, including a bookstore, a record store, and Wilson’s, one of the last independently owned department stores in the country.

But Norman and business owners in Greenfield are noticing that the Main Street stores are now struggling in the face of another force that’s become more and more powerful in recent years: e-commerce…

But the challenge posed by online shopping to local businesses is immense. Even Al Norman, who refuses to shop at Walmart, says he doesn’t have the same aversion to Amazon, in part because he thinks the internet is the future of shopping. His wife has a Prime account, and he recently ordered tea from the website when he couldn’t find it locally, he said, adding that he has no plans to organize protests or zoning meetings about Amazon. He doesn’t love the idea that some of his money is going to Jeff Bezos, “the richest human around,” as he refers to the Amazon founder, and so still shops locally whenever possible. He doesn’t know whether he’ll still be doing that in a decade. When he launched the first campaign against Walmart in Greenfield 25 years ago, he led activists with bumper stickers that said, “If you build it, we won’t come.” He knows the same can’t be said for Amazon, because shoppers, including him, are already there.

Can a community oppose Walmart and not Amazon? Here are some of the common complaints against Walmart and other big box retailers:

  1. Land use, particularly the large parking lots and the contribution to sprawl and driving as well as issues with water and open space.
  2. A negative influence on local businesses. Walmart’s prices and options made it an attractive place to shop compared to local small businesses.
  3. A detrimental effect on local social life, ranging from decaying downtowns that used to be at the center of civic life to low wage jobs affecting health care systems and local wealth.
  4. The wealth generated by large corporations located somewhere else with little visible impact on communities where stores are located.

Do these same concerns apply to Amazon? They could: Amazon’s warehouses and other facilities take up space, it certainly affects local businesses, it encourages less social interaction as you can shop from home, and Amazon has tremendous revenues (and its founder, like the Waltons, have tremendous wealth). But, it seems like the fact that Amazon is “somewhere else” compared to the big box stores – the physical footprint of Amazon touches fewer communities that all the locations of Walmart, Target, Home Depot, and others – means that people can support it without feeling as bad about its negative effects on communities. Because it is viewed as being online, Amazon is an issue for only some communities and not many.

Yet, I think an argument could be made that Amazon and other online retailers can shape local conditions even more than big box stores or other local retailers. The Internet makes it possible to act as if we are in a completely placeless world (even though this is not true) and to leave certain problems for others to solve in other places. Only in certain circumstances, like when cities fight to offer Amazon a great tax break or deal in order to become home to a second headquarters or groups in Silicon Valley express frustration about mammoth tech headquarters, are we reminded that even Internet companies affect communities.

To be consistent, big box retailers and Internet retailers both threaten local communities and smaller businesses. One may be more obvious than others and they offer different kinds of conveniences but both can contribute to a less civically minded and placed America.

Amazon jobs vs. no jobs in American cities and suburbs

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With Amazon expanding in many locations across the United States, are these the kinds of jobs communities should seek? Here is the conclusion of one recent discussion of the issue:

It’s true that cities desperate for jobs may find it difficult to attract companies if they pass minimum-wage mandates or other labor laws. But the alternative, it seems, is jobs that don’t create a middle-class lifestyle for residents, which in turn affects local spending, the housing market, the tax base, and leads to a poor standard of living. Many cities, San Bernardino included, are calculating that any job creation is good news. They may soon find that with Amazon, that calculation does not apply.

This is not a new issue although Amazon might be the most visible manifestation of concerns right at the moment. Walmart has and still does face such questions. Fast food and retail jobs as larger categories attract this scrutiny at points.

For two reasons, I do not see most American communities during down these jobs, even if they are not ideal or even good positions of employment.

  1. Every politician from the local to federal level wants to promote job creation. It is still hard to have a deeper conversation about the kinds of jobs being created. What tends to matter are the numbers. If you are the politician who can claim adding jobs (and very rarely is this the result of one person or a short process), you have a powerful political weapon.
  2. What is the alternative to not accepting these jobs? Companies might move right over the border. This happened in Chicago when they insisted on certain with Walmart. The company responded by opening locations right over the border and the jobs and revenues went to other communities. If a community turns down jobs, will they be able to attract others? Until we have either regional cooperation where sets of communities set these conditions or states pass overarching regulations (or a third option of universal basic income?), individual communities will be forced to make tough decisions: promoting less than ideal jobs or possibly having no jobs.

This issue will continue whether with Amazon or other companies.

The suburban expansion strategy of Sears in the 1920s

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In an intriguing article comparing the rise of Sears and Amazon, Derek Thompson explains how Sears expanded from a mail-order business to physical stores:

In the early 1920s, Sears found itself in an economy that was coming off a harsh post-World War recession, according to Daniel M. G. Graff and Peter Temin’s essay “Sears, Roebuck in the Twentieth Century.” The company was also dealing with a more lasting challenge: the rise of chain stores. To guide their corporate makeover, the company tapped a retired World War I general named Robert Wood, who turned to the U.S. Census and Statistical Abstract of the United States as a fount of marketing wisdom. In federally tabulated figures, he saw the country moving from farm to city, and then from city to suburb. His plan: Follow them with stores.

The first Sears stores opened in the company’s existing mail-order warehouses, for convenience’s sake. But soon they were popping up in new locations. Not satisfied with merely competing with urban department stores like Macy’s, Wood distinguished new Sears locations by plopping them into suburbs where land was cheap and parking space was plentiful….

The company’s brick-and-mortar transformation was astonishing. At the start of 1925, there were no Sears stores in the United States. By 1929, there were 300. While Montgomery Ward built 90 percent of its stores in rural areas or small cities, and Woolworth focused on rich urban areas, Sears bet on everything—rural and urban, rich and poor, farmers and manufacturers. Geographically, it disproportionately built where the Statistical Abstract showed growth: in southern, southwestern, and western cities.

So what is the equivalent today of the burgeoning suburbs of the 1920s in terms of locations? The end of the article hints at one option:

Amazon, too, will thrive as long as it uses American demographics as a roadmap and takes advantage of new personal technology, like mobile phones for shopping and AI assistants for the home. In the last six months, Amazon has spent $13 billion to buy Whole Foods and its upscale urban locations. At the same time, it has offered discounts for low-income shoppers to become Prime subscribers.

Locating in wealthy communities is an interesting strategy. Other major popular retailers today are following such a model: think of Apple stores (perhaps another reason they cannot truly be town squares if they are primarily in wealthy areas) and Starbucks locations (less exclusive than Apple but still located within reach of wealthier customers or along well-trafficked roadways – see all 11 locations in the wealthy suburb of Naperville). Could we end up with a bifurcated retailing model where the wealthy (and those who can travel to these locations) can shop at a bricks and mortar store while the majority of Americans primarily shop online? This might be an overlooked edge for Walmart at this point: Amazon may rule online but Walmart stores, like Sears, are where many more typical Americans are and it may take some time to switch loyalty.

A new suburban Walmart comes with tax revenue, crime, and economic development

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How exactly does a new Walmart change a suburb? Here are at least a few factors to consider:

From its opening day to June 30, 2017, officers responded to 445 calls for service at Walmart, 166 of which resulted in arrests, according to records obtained by the Daily Herald. That means police were called to the store an average 1.2 times per day in its first year…

Walmart announced in 2012 its plans to close an East Dundee store and build the Carpentersville supercenter less than three miles away, prompting a lengthy legal battle between the company and the two villages. Walmart is expected to receive $4.3 million in tax increment financing funds ­– property taxes above a certain point in the area that would have gone to local governments — for the new store…

Though he declined to disclose specific sales numbers, Rooney said the new Carpentersville store has generated more sales tax revenue than East Dundee reported losing…

Already, the supercenter has significantly increased traffic and economic interest on the village’s east side, he said. Plans are moving forward for constructing a new five-tenant building and an O’Reilly Auto Parts on the store’s outlots.

To be honest, many suburbs cannot afford not to welcome Walmart into their communities. It is rare to find a user for a decent sized portion of land along a major road that will bring in so much tax revenue and provide jobs. The increase in crime can be chalked up as simply part of doing major retail business (I assume there may be bumps with other major retailers or shopping malls) and may not be a huge issue if it is largely isolated to the Walmart site.

In the long run, there are additional factors to consider including the local business climate with the behemoth Walmart in town (more competition for certain businesses), the opportunity cost of what else might have operated on that site, and the image of having a Walmart and related businesses. There is a reason more exclusive communities turn down big box stores and large strip mall areas. Furthermore, the fate of East Dundee could soon befell Carpentersville; if Walmart eventually wants a better deal or a bigger store, they can simply move and bring their benefits (and problems) to a different suburb.

As I suggested above, given these short-term and long-term outlooks, most American suburbs would choose to welcome Walmart. From whence the Walmart came does not matter while the tax receipts can be blinding to many.