Walmart shuts 269 stores worldwide
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On Friday, Walmart announced it will close 269 stores globally as it struggles to compete with online retailers like Amazon.
The news came as US retail figures showed lower than expected holiday sales figures across the market.
Sales rose just 3% in November and December, falling short of the expected 3.7% growth according to the National Retail Federation.
The Walmart closures will affect 10,000 US workers and 16,000 worldwide.
The announcement came three months after Walmart chief executive Doug McMillon told investors the company would focus on becoming more nimble.
“Closing stores is never an easy decision. But it is necessary to keep the company strong and positioned for the future,” Mr McMillon said in October.
The national shortfall in holiday shopping came even as retailers offered steep discounts to attract customers.
Online retailing did see a significant increase, rising 9% to $105bn (£73.4bn), but it was not enough lift the overall figures.
Concerns about holiday shopping added to market concerns as stocks fell sharply. The Dow Jones fell 400 points in morning trading.
Neil Saunders, chief executive of retail analysts Conlumino, said it was a significant move: “Walmart’s decision to scale back its store numbers in the US underlines how much the retail landscape has changed over the past few years. The blunt truth is that while stores remain a vital part of the retail mix, they are not quite as relevant as they used to be.
“The growth of online, and especially of Amazon, has undermined that advantage and has given almost all consumers easy access to a comprehensive and relatively cheap assortment of products.”
He added that where Walmart was going, others would follow.
Weak
The weak economic outlook was not confined to the service sector.
On Friday, the Federal Reserve reported industrial production in December shank by 0.4% the second month of contractions.
Industrial production, which includes manufacturing, mining and utilities has been hit by a strengthening dollar and global economic weakness.
“With the dollar still rising at a rapid pace and global demand clearly pretty weak we don’t expect much from the US manufacturing sector this year,” Paul Ashworth, chief US economist at Capital Economics, wrote in a research report.
Warm weather also hit industrial production figures.
The unusual temperatures pushed utility output down 2% in December following a 5% decline in November.
Questions & Answers
Q.How many jobs will be lost globally due to Walmart's store closures?
How many jobs will be lost globally due to Walmart's store closures?
The closures will affect 10,000 US workers and 16,000 worldwide. This reduction in the workforce is a direct consequence of the company's decision to shut down 269 stores globally, aiming to streamline operations.
Q.What reason did Walmart's chief executive give for closing the stores?
What reason did Walmart's chief executive give for closing the stores?
Walmart chief executive Doug McMillon stated that closing stores, while difficult, is necessary to keep the company strong. He indicated this decision helps position the company for future challenges and adapts to the evolving retail landscape.
Q.What was the growth rate for online retail sales mentioned in the article?
What was the growth rate for online retail sales mentioned in the article?
Online retailing saw a significant increase, rising 9% to $105bn (£73.4bn). This growth was notable, but it was not sufficient to lift the overall holiday sales figures across the market to expected levels.
Q.What other economic factors were affecting the US economy besides retail figures?
What other economic factors were affecting the US economy besides retail figures?
The Federal Reserve reported industrial production shrank by 0.4% in December, the second consecutive monthly contraction. This decline, impacted by a strengthening dollar and global economic weakness, includes manufacturing, mining, and utilities, further indicating economic concerns.