Walmart has announced the closure of four of its eight stores in Chicago, citing annual losses that have nearly doubled in the last five years. The locations of the four stores are in predominantly minority neighborhoods in Chicago's South and West Side, areas that have long struggled with grocery and retail access. Walmart CEO Doug McMillon had previously highlighted the company's efforts in Chicago as a "critical part" of its $100 million pledge to advancing racial equity in 2020. The closures raise questions about the effectiveness of government strategies that rely on national chains to improve food and retail access in underserved areas, and the impact of big-box retailers on local businesses. Walmart's decision follows years of resistance in big US cities, but also the recent pullback of major national chains such as Walgreens, CVS, and Starbucks. Retailers face several challenges in urban locations, including higher rents, higher sales targets, higher levels of theft and other crime, and reduced foot traffic and sales due to remote work and the growth of Amazon and same-day delivery.
Chicago Mayor Lori Lightfoot expressed her disappointment with Walmart's decision, calling on the company to ensure that the soon-to-be-closed stores are repurposed with significant community engagement to serve their neighborhoods. Walmart said workers in these stores will be eligible to switch to other Walmart stores and it will work with local leaders to help find reuse options for the buildings. Walmart's remaining four Chicago stores "continue to face the same business difficulties," but the company believes closing these four will give the others the best chance of staying open. Walmart remains committed to Chicago, but its ability to drive down costs and keep prices low has proven less effective in cities. Walmart's 180,000 square-foot supercenter model is not as well suited for urban neighborhoods as it is for suburban and rural areas. Walmart's decision to close stores in Chicago and other national chains' pullback in major US cities may signal a shift in the retail landscape and the need for new strategies to improve food and retail access in underserved areas.