Do Walmart’s Stores Just Not Fit in Chicago?

Walmart is closing four of the eight stores it operates in Chicago after concluding that it could no longer sustain the losses it has experienced since it opened its first location in the city 17 years ago.

The retailer said it has lost “tens of millions of dollars a year” in Chicago and its “annual losses nearly doubled” over the last five years. “The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serving the community.”

Walmart’s failure in Chicago has not been for a lack of trying. The company said it had built smaller stores, localized product assortment and expanded services beyond traditional retail to improve results. The retailer has spent $70 million in recent years to upgrade its stores in the city, build two new Walmart Health facilities and a Walmart training center.

The company said it had enlisted the support of local civic and government leaders to share the challenges it faced in Chicago and yet nothing made a material difference in its results.

The seemingly sudden nature of the closings has surprised many in Chicago. Walmart said the shuttered stores would be closed to the public after this Sunday. Pharmacies inside the stores will remain open to patients for up to 30 days.

Walmart said associates affected by the store closings may transfer to its other stores or Sam’s Club locations. Company representatives are working with associates to help match them to available jobs.

All associates will be paid until Aug. 11 unless they transfer during that time. Those who do not transfer by Aug. 11 will receive severance benefits.

The stores closing in Chicago come on the heels of Walmart’s recent announcement that it was shuttering its last two locations in the Portland, OR market.

“The decision to close these stores was made after a careful review of their overall performance,” a Walmart spokesperson told KPTV. “We consider many factors, including current and projected financial performance, location, population, customer needs, and the proximity of other nearby stores when making these difficult decisions.”

Walmart has also announced layoffs of over 2,000 warehouse workers at online fulfillment centers in California, Florida, New Jersey, Pennsylvania and Texas.