Walmart announced today that it is closing 269 stores, including 154 in the U.S. This is a very bad sign for Walmart. But is it a bad sign for you?
Well, that depends who you are. In the short term, this is likely a very bad sign for you if you are: a Walmart employee, a Walmart investor, or an unemployed person who had been hoping to get a job at the local Walmart, that is now closing. In the long term, the existence of fewer Walmarts is a good thing for: small businesses everywhere and their employees, most other non-Walmart retailers, and humanity’s soul in general. Since life is lived in the short term, though, it’s worth thinking about what’s happening right now.
Walmart has been struggling with weak financial performance for years now. The company had to raise wages and invest in sprucing up its stores and its website, because it knew that its stores were poorly managed and its sales were suffering. Once upon a time, Walmart appeared to be an unstoppable retail juggernaut that would inevitably destroy its competition with huge scale and rock bottom pricing. Then Amazon came along. Now, Walmart finds itself a laggard in online retailing, which is growing fast even as traditional retail sales stay flat. Walmart is a $200 billion company, but Amazon is worth nearly $270 billion, which shows that everyone believes Amazon’s future is much brighter, even though it doesn’t sell as much crap as Walmart at the moment.
All that adds up to today’s announced store closings. Walmart has more than 11,000 stores, meaning that this is a small move in terms of absolute numbers. But it is something else very important: a concrete move backwards from retail dominance. If you hate Walmart for all the right reasons, you can take this as a ray of hope. The world will not be dominated by Walmart after all. Unfortunately, it is going to be dominated by Amazon, instead, which is, in its own way, nearly as bad.
Fuck Walmart, and fuck Amazon. The most important thing to focus on in this retail battle is what it will mean for the millions of retail workers. The entire retail sector, with some exceptions like Costco, remains committed to low wages, poor working conditions, and hostility towards organized labor. The question now is whether the next era of retailing will be just as bad as the last one. If the workers want to secure an improved position, they better start digging in. The weaker Walmart gets now, the more pressure unions need to apply. They might not get a second chance.