A Quick Look at the Walmart Closings

Quote of the Day

The secret of joy in work is contained in one word -- excellence. To know how to do something well is to enjoy it.

— Pearl Buck. I also enjoy when I have mastered a skill.


Figure 1: List of Walmart Facilities Being Closed.

Figure 1: List of Walmart Facilities Being Closed.

I live in Minnesota where Target is a major employer. Target recently greatly overexpanded into Canada and had to close its stores there. There were numerous business issues associated with their Canadian operations, such as poor locations and inadequate logistics. Target chose to give up and simply close their Canadian operations.

I saw in the news that Walmart is in the process of closing 269 of its stores, including 154 in the US. I became curious where the US store closures were occurring, so I downloaded the closings file and generated a pivot table of the data (Figure 1). It looks like most of the store closures involve:

  • Walmart Express stores
  • Stores that are geographically close to other Walmart stores.
  • Over half the stores are in six states: TX, NC, AR, CA, AL, KS.

As with Target, it looks like a classic case of overexpansion.

My father in-law used to work for the Small Business Administration (SBA) and helped start hundreds of small businesses. He told me that the most dangerous time for a small business is its first attempt at expansion. He often discussed how a viable trucking firm with one truck often would fail when it expanded to two trucks. The business owners often  underestimated the challenges with:

  • finding the time needed to find work to fully utilize trucks instead of one
  • hiring good staff
  • having to work through other people rather than doing everything yourself

It looks like Target and Walmart are showing that expanding a large business can also be a challenge.

 
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