Walmart is closing four Chicago stores due to unprofitability, following Aldi and Whole Foods out of the Windy City.
By Eileen Griffin
Walmart announced they are closing four Chicago locations, joining the list of businesses leaving large cities in recent months.
Walmart stated four of its eight Chicago-area stores will close on April 16, the Chicago Tribune reports. The reason cited by the company is the unprofitability of the stores.
Walmart’s statement announcing the move says its Chicago stores have not been profitable since the first one opened 17 years ago.
“[T]hese stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years,” the statement reads. “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.”
Walmart invested hundreds of millions of dollars in the city of Chicago, including a $70 million investment in upgrades, a health facility, and a training center. The company will donate The Walmart Center training facility to the city.
Employees can transfer to another store or accept a severance package potentially leaving many unemployed.
Outgoing Mayor Lori Lightfoot (D) criticized Walmart for their decision. In November Lightfoot said the Whole Foods grocery store chain was “not a good partner” when they also chose to shut down stores.
When Whole Foods first opened its location in Englewood, the city provided $10.7 million in taxpayer-funded support.
Lightfoot attacked Aldi for closing a Chicago store in June 2022, saying that Aldi should be “ashamed.”
“Aldi’s, hear me loud and clear,” Lightfoot said. “Come to the table and talk and work with us, or there are going to be major challenges for you in the city of Chicago.”
The Walmart stores closing are located in minority communities in the South and West sides of the city. These neighborhoods struggle to retain business such as grocery stores, CNN reports.
Many businesses are pulling out of cities where concerns are growing about worker and customer safety, as Heartland Daily News previously reported. Profitability is also impacted by community crime and retail theft.
Starbucks recently closed several locations in crime-ridden cities such as Seattle, Los Angeles, Philadelphia, Washington, D.C., and Portland, Oregon.
A company spokesperson for Starbucks told CNN that they were closing due to safety concerns.
“After careful consideration, we are closing some stores in locations that have experienced a high volume of challenging incidents that make it unsafe to continue to operate,” the Starbucks spokesperson said.
In a letter to employees in July 2022, Starbucks senior vice presidents Debbie Stroud and Denise Nelsen explained the reason for the change in direction.
“You’re also seeing firsthand the challenges facing our communities – personal safety, racism, lack of access to health care, a growing mental health crisis, rising drug use, and more,” the letter reads. “Because simply put, we cannot serve as partners if we don’t first feel safe at work.”
At the end of last year, Walmart warned of profitability decline due to the growing problem of shoplifting.
CEO Doug McMillon told CNBC in December that rising theft would lead to higher prices and store closures.
“Theft is an issue,” McMillion said. “It’s higher than what it has historically been. We’ve got safety measures, security measures that we’ve put in place by store location. I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” McMillon said.
Target CFO Michael Fiddelke told CNBC shoplifting has increased approximately 50 percent year over year, costing the retailer $400 million in losses in 2022. The theft is organized, not petty theft, Fiddelke says.
Economist Stephen Moore says leftist policies are “killing” America’s great cities.
“It’s not just Chicago that has become a war zone,” Moore wrote. “Portland, Seattle, and San Francisco were not so long ago the crown jewels of the West Coast. They were said to be progressive cities that worked. No more. Now, they are unlivable. San Francisco is overrun with homeless people on seemingly every downtown street corner, feces on the sidewalks and trash everywhere.”
Chicago’s new Mayor Brandon Johnson (D) is likely to continue Lightfoot’s soft-on-crime approach to law enforcement.
“The fact that Chicagoans have elected not a reformer, but a deformer, suggests that inner-city residents still don’t get it — or they don’t care,” Moore wrote. “Or they are all on the payroll of the city governments that are going bankrupt. Alas, our cities can’t be saved if the voters in these metropolises don’t want to be saved.”
For more Budget & Tax News.
For more Rights, Justice, and Culture News.
