Walmart Walking Back the Activism, Closing Chicago Stores

In the wake of the death of George Floyd, many organizations and businesses, in an attempt to be woke and socially conscious wrote checks that ultimately they couldn’t cash. I’m not talking about actual checks, though those were handed out to grifting organizations like BLM like Halloween candy.

I am referring to misguided commitments to expand services and businesses in places where it was clear they shouldn’t be. There are reasons that companies like CVS and Walgreens and Cracker Barrel are fleeing woke, leftists cities. There’s also a reason you don’t see Walmart Supercenters in urban areas. They just don’t work.

Now, three years later Walmart is admitting as much, and shuttering several of their Chicago stores. Check this out

In 2020, Walmart pledged to expand in Chicago as part of a corporate racial justice initiative in the wake of George Floyd’s death.

Walmart declared efforts in Chicago a “critical part” of a broader $100 million pledge to advance “racial equity.”

The retailer vowed to increase its presence in minority areas of the city.

“Chicago will be an example of what’s possible when we leverage business, government and community organizations for the good of all,” Walmart CEO Doug McMillon said in 2021.

Apparently “racial equity” doesn’t include opening stores in areas where you are going to get robbed. It probably never should have. There’s a reason the south side of Chicago isn’t exactly littered with big box retailers, banks, and grocery stores. It isn’t because these areas don’t need food and household items, it’s because they can’t afford the theft and loss involved with being in high crime areas.

The company announced this week it would close four poor-performing stores out of the eight in the city.

Three of the location are located in Chicago’s South and West Side neighborhoods, predominantly minority areas.

But there’s one initiative that corporations care more about than perception: the bottom line. Expanding in Chicago was never plausible.

Leading retailers struggle to expand in major cities. As retail professor Ray Wimer explained to CNN, the benefits of Walmart’s ability to drive down costs and keep prices low are less effective in cities.

“Walmart’s typical 180,000 square-foot supercenter model is not as well suited for urban neighborhoods as it is for suburban and rural areas,” writes CNN.

Where are inner city folks supposed to get cheap Chinese goods if not from Walmart? It is sad that big box stores can’t stay in business, but essentially the politics and cities do it to themselves. Blue cities don’t enforce the laws. That leads to more theft and crime, which leads to suppliers of essential goods to walk away.

Specifically, urban locations carry higher rents and thus need to hit higher sales targets to break even. Walgreens, CVS, Starbucks and Whole Foods have faced similar challenges in blue cities.

Retail brands in said cities also experience higher levels of theft. In fact, Walmart recently departed Portland following a spike in “shrink,” an industry term for losses related to in-store theft or fraud.

Blue cities have also increased reliance on online shopping with a rise in remote work, shrinking foot traffic.

Ironically, long-term lockdowns hurt the expansion of retail in areas claiming to need “racial equity.”

You can blame the people in the neighborhoods, but the biggest part of the blame needs to be shifted to city leadership. With no fear of repercussions, criminals feel emboldened to do more crime. Blue cities are bleeding residents, businesses, and revenue, leaving only the poorest that can’t move, and subsequently have no place to shop.

Corporations will continue to flee, and you can’t blame them. At the end of the day, social justice sounds nice, but it is about profits, and when the profits are running out the front door while security watches, the stores will run away as well.


Notice: This article may contain commentary that reflects the author's opinion.

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