Wal-Mart, the world's largest retail chain will be closing 269 stores globally, including more than 150 locations in the United States. The move will eliminate close to 16,000 jobs.
The retail giant has been experiencing slow-growing sales and is facing stiff competition from online shopping.
Wal-Mart CEO Doug McMillon says that closing the stores is “necessary to keep the company strong and positioned for the future."
Wal-Mart currently operates 11,600 locations worldwide , the 269 stores it is closing represents around 1% of its global sales. But the company is planning to expand 300 stores next year beyond its home base in the United States where it is planning to slow down expansion.
The main problem for Wal-Mart is that US retail sales weakened to 0.1% on December and only rose to 2.1% for the entire year of 2015. Compare that to a growth rate of 3.9% for 2014.
150 stores will be closing in the United States, including all 102 Wal-Mart Express Stores, a smaller version that came about in recent years as a move for the company to create growth beyond its Supercenters.
Wal-Mart has been struggling to make this Express Stores more profitable. Initially the aim was to boost sales by aggressively opening smaller stores all over the country. The Express Stores were about the size of a drug store with a larger grocery section and they were usually located nearer the shoppers, compared to the Supercenters that are usually located in the outskirts.
The main problem for this format is that consumers still expected lower prices from a Wal-Mart express store similar to its Super Centers. But since it is a smaller location offering less items with a lower rate of turnover, it tends to struggle in meeting the cost of maintaining its overhead, which means less profit.
Most of the US stores will be closing as early as Sunday, and the company plans on shutting down all 154 stores by January 31st, eliminating close to 10,000 jobs in the country.