The United States economy is going through one of its most complex stages, as it is determined by rising inflation and the digitalization of consumption. In this landscape, traditional retail chains like Walmart and Costco have had to rethink their strategies to remain competitive. Walmart's recent decision has left its competitors stunned, especially Costco, which sees how its main competitor takes drastic measures in the face of the new economic landscape.
Recently, Walmart has decided to close several of its less profitable stores in different states across the United States. This action responds to the drop in sales in the sector and the need to adjust its physical presence. Although the company has been known for its dominance in physical retail, this shift is a clear sign of its intention to adapt to the new market circumstances.
Walmart Has an Expansion Plan in New Areas
Despite these closures, Walmart has not stopped innovating. The company has found a growth area in the gas station and convenience store business. In fact, it plans to open new service stations and more small retail points as part of its diversification strategy.
Dave DeSerio, Vice President of Walmart US, highlighted that these new openings aim to offer greater value to customers. This strategy is aligned with the company's philosophy of maintaining low prices.
The expansion into gas stations is part of a broader strategy to strengthen Walmart's business model. This measure responds to the growing demand for convenience and consumers' preference for making quick purchases on their daily commutes.
Meanwhile, Walmart is also increasing the number of Neighborhood Market stores, which are smaller and strategically located in residential areas. These stores are designed to make daily shopping easier for customers without the need to travel to a larger Walmart. A fact that allows for a more agile and convenient shopping experience.
The Closed Stores, a Necessary Adjustment for Walmart
Walmart's closures have been a necessary part of its restructuring. The stores that have been closed include some key locations in cities like San Diego, California, and West Covina, among others. The closures also affect cities like Dunwoody in Georgia and Towson in Maryland, where local competition is strong. Despite these closures, Walmart keeps its focus on rural areas and markets with higher demand for its products.
The decision to reduce physical presence in certain cities reflects Walmart's adaptation to new consumption trends. While physical retail remains crucial in rural areas, large cities require a more selective presence adapted to local needs.
Walmart continues to show its ability to adjust to new market dynamics. In 2020, the company launched Walmart+ in response to the growing competition from Amazon Prime and has leveraged its physical stores as distribution centers. These decisions ensure that Walmart remains a key player in American retail, despite the challenges of the economic environment.