What happens when Walmart closes a store?
One of the criticisms leveled at Walmart in its rise to become the world’s largest retailer is that every store the retailer opened forced others to close. In the end, supporters of the chain argued that the net result was a benefit as Walmart provided jobs and that its low prices helped many. But what happens when Walmart establishes a store in a town and later decides to close it?
According to a Bloomberg article, the consequences can be severe. Oriental, a town of about 900 in North Carolina, recently saw its local grocery store of 44 years close because it could not compete with its much larger rival. A few months after the grocery store closed, Walmart announced it was pulling out as well.
“I was devastated when I found out. We had a pharmacy and a perfectly satisfactory grocery store. Maybe Walmart sold apples for a nickel less,” Barb Venturi, mayor pro tem for Oriental, told Bloomberg. The mayor said the store closing may also hurt property values.
Walmart has just closed a supercenter in Winnsboro, SC and one commercial real estate broker thinks there may be some benefit. David Stuck, a broker in Columbia, told The Wall Street Journal, that Walmart’s presence in the town of 3,500 had kept other retailers from opening stores. “No one wanted to compete with it,” he said.
With Walmart gone, stores that have remained vacant, such as a former Food Lion and a Goody’s, may now find tenants.
While the Friedman Doctrine insists that the only social responsibility of business is to be profitable, Walmart said its representatives have spoken with community leaders in areas where the company is closing stores in an effort to be helpful. What form that help will take was not clear from reports.
- As Wal-Mart Closes, Town Looks to the Future – The Wall Street Journal (sub. required)
- Wal-Mart: It Came, It Conquered, Now It’s Packing Up and Leaving – Bloomberg
Do you see Walmart’s decision to close stores, particularly in areas where it is shuttering its big boxes, as an opportunity or an impediment to growth for the communities the stores once served? What responsibility, if any, does a successful business such as Walmart have to communities when it decides to pull out?