Entrepreneurship
Walmart Raises Profits By Betraying Small Towns
- Walmart announced that it will close over 100 stores around the country on Thursday for good.
- Many of the stores are located in small towns where the locals don't have other options for fresh groceries.
- In one town in Texas residents are upset with Walmart for coming to town, running their grocery store out of business, and then closing up the store after only 12 months.
- Small town economy which is already vulnerable will undoubtedly suffer from these closures.
More than 100 Walmarts around the country shut their doors Thursday for good — many in small towns and rural areas with few other shopping options.
The retailer cites a long-term strategy shift and financial performance. Company shares are down 25 percent over the past 12 months, and the nationwide closures will also impact thousands of employees, reports CBS News correspondent David Begnaud.
Six Walmart Stores in North Mississippi Set to Close January 28, 2016 https://t.co/FwCb85cqM7 pic.twitter.com/aJ073OeoTx
— The Local Voice (@TheLocalVoice) January 15, 2016
“It's maddening because Walmart chose to do this,” said resident Retha Thompson, who feels betrayed by Walmart's decision to leave Whitewright, Texas just 12 months after its grand opening. “They chose to come here and then when they put the other grocery store out of business, they want to close down and leave. I'm mad.”
She's talking about “Pettit's,” the mom and pop grocery that was a mainstay in this small town for nearly 60 years.
Related: Local Walmart Throws Vet To The Curb For Trying To Sell Memorial Poppies…
“Business – it just quit coming,” Larry Deeds, the store's co-owner said.
Pettit's closed about nine months after Walmart opened.
“It's almost enough to bring a tear to your eye to see all these shelves empty,” said Will Pettit, who worked here since he was 16.
When Walmart moved in last year, Whitewright's Mayor Allen West said a little competition from Walmart was a good thing. But now that it's leaving, “it's going to hurt the city financially, it's going to hurt the citizens economically and not good for their mental status,” the mayor said.
Walmart is closing 154 stores in 27 states, many of them in small towns. In a statement to CBS News, Walmart said:
“The decision to close some of our stores was not easy and we share in the communities' disappointment. We're always searching for opportunities to serve more customers throughout the country — especially those in underserved communities. We're now focused on where we can help impacted communities through our plans for charitable giving and expediting the process to work with potential buyers for these locations.”
“Communities are finally getting a look at not only the effects of when Walmart comes into town but also when they leave,” said Bloomberg news reporter Shannon Pettypiece. “And I think that is a double blow for a lot of people.”
But Deeds said Walmart doesn't deserve all the blame.
“I lost some customers that had been coming to me for 20 or more years,” Deeds said.
And now that Walmart is closed, Retha Thompson will drive half an hour to the closest grocery store.
“It won't be Walmart. I'm done with Walmart,” Thompson said.
Two of Thompson's daughters-in-law were Walmart employees. They were offered either a severance package or the opportunity to relocate to work at another store, as goes for thousands of other employees across the country.
Watch this news from CBS This Morning here:
45 Comments
The small towns will survive because ALL the “Mom and Pop” businesses Walmart caused to shut down can come back and serve their localities increasing employment and re-invigorating their local ecomomies
if you have a walmart in your community, then your community government gave them huge tax exemptions and provided lots of other fiancial incentives to come and build there. they reduced the taxes walmart would have paid to your community because they would reap more taxes than they loose by TAXING THE RESIDENCE’S via your sales tax and your tax money being used to back the bonds sold to get the money to put in all the money required for sewer improvements, improved power service’s and highway construction to provide the access to the new walmart…
then you abandoned the local stores even when their price on an item was cheaper than walmart because you wanted convience!! maybe you can now convert the closed walmart into a housing community for the muslim refugees, that will bring your jobs back etc…LOL,LOL,LOL
1. Walmart is a company . The first obligation of a company is to benefit its shareholders. If it is not always looking to improve its business return, shareholders should change management.
2. Did Walmart promise the communities they would remain there indefinitely? If not, what is the betrayal?
3. The citizens of the communities served their self interest in purchasing from Walmart rather than the local businesses. That is what caused the local businesses to close.
Conclusion: this is not a conspiracy by Walmart against those small communities. There was no betrayal.
Walmart is a business established to make money. It is not a charity. Nothing lasts for ever and people should learn (but they don’t) to take the sour with the sweet.
We did this to our selves. Demanding lower prices, higher wages, regulations that run American companies out of the market. The WM Shoppers did this to all America. They, betrayed America for china.
Dollar General or local individuals will gladly fill that void. Their may be a inconvenience for a while until the transition occurs, but if there is an business opportunity someone will be glad to step in provide for that need.
If your not making money, why stay opened
A corporation must correct mistakes or face total failure.
and so must COUNTRIES!
Two of the stores that closed are in small towns that I frequent. I have seen in just those towns 75% of the mom and pop’s close now there are no small grocery’s or clothing or hardware or shoe stores left to fill the gaps. Wal-Mart came in to drive out any localized small town competition and run. Screw the locals and withdraw. Just like any other big brother business.
Some smart smaller business like Kroger etc will see the opportunity and move in the fill the void.
We live in a very small town with a large Super WalMart. The only way they can stay open is because they are right off of I-10. Most of us still do our grocery shopping at our local store, where we know we get fresh meat and staples. We actually had another grocery store that opened and is doing okay. People just don’t like the WalMart. When Sam Walton started WalMart and it was all “made in the USA”, it was a very different store. Everything comes from overseas in there now and most of it is from China and they have had some dangerous stuff delivered.
Wal Mart comes to the small town. The sheeple
(that s the damn fool people} go to Wal Mart
This puts the Mom & Pop local stores out of
business. Then Wal Mart packs up and moves
and the small town has to drive miles to big town to make purchases since WalMart ran
their local merchants out of business.
WAKE UP AMERICA KROENKE IS SCREWING YOU LIKE HE SCREWED ST LOUIS.
O
Locals and employees stealing stores blind. Therefore ending their own source of income.
The small stores profit margin is not enough to handle that much loss. So don’t complain that is bits big business, a lot of theses stores people ended their on future.
This charge is ridiculous. First, Walmart must survive. If Walmart did not make these kinds of business decisions, the business would not survive. Walmart employees would not have a job and we customers would no longer have the option of shopping at Walmart.
No one stays in business if they are losing money. That is just simple economics. Wal Mart shouldn’t be punished because they are trying to stay afloat.
This is an opportunity to fill the void. Who will rise to the challenge? Maybe it won’t be the stores that went under but either a new m and p or another big conglomerate. Make America great again
They are apparently paying slightly more, but raising prices and are less competitive with local grocery stores, etc. COSTCO is really competitive now.
Walmart is a profit-making public company and owes to its stockholders the duty to manage effectively and to maximize profits. It has no public duty to refrain from closing unprofitable stores. If those stores were doing sufficient business, some other company will buy or lease the property and replace Walmart. This is the way business works in a free economy.
Walmart is too big for it’s own britches!! It and every Over-size Corporation including Banks, Insurance Companies and Pharmaceutical Companies should be disassembled by the U.S. Government and their assets sold off in pieces to the highest bidders.
Spouted like a good socialist/communist your parents must be proud of you comrade!!
I have to drive a bit over a half hour to purchase groceries. I’m not saying we don’t have a grocery store here, there are two in the county. The major problem is that neither of these are worth a damn.
Several years back the original, local owners decided to retire and put the business up for sale. They were bought by people that live out of state (New York in one case), and they’ve sent their kinfolks down here to run the businesses. These people know nothing of customer service, either external or internal. There has been major turnover in employees at these stores. The store in my town has no heat, and the freezer cases routinely go out. Canned goods and dairy products are often out of date. I’ve seen United, Albertsons’, and HEB throw out better looking produce than is on the shelves of our “local” stores.
I’ve seen this same situation in a lot of small towns, where foreign investment comes in. Small stores in out of the way places are nothing more than a tax write-off for them.
I feel for the elderly folks that can’t drive or can’t drive well enough to handle traffic in the larger towns/cities. That might be a niche that could be filled by quality folks. A bonded delivery company purchasing the elderly folks’ grocery lists and delivering them.
Walmart isn’t the only devil in this game.
Our local Chevrolet dealership was forced out of business several years ago because larger dealerships were losing sales to this dealership. The larger dealerships had enough pull with GM to close this local business.
Our local pharmacies were forced out of business, not because they couldn’t compete with Walmart or other larger chains, but because the insurance companies penalize anyone that wants to purchase local rather than using their pharmaceutical warehouses.
The Alco chain of stores did much the same to local merchants in small towns, and is now out of business.
Walmart is just the most recent to be in the media spotlight.
I learned in sales school that when people refuse to buy from you “It is almost always about the money”. Same holds true for Walmart closing their stores in mostly small towns….It is all about the money, in this case, they are loosing.
It was the town fathers that let Walmart replace their existing economy, and it was town fathers who were short-sighted that Walmart could then take away their economy. Walmart should be ashamed because they knew it would happen someday.
Walmart had to put a tremendous amount of study into the opening of this or any other store. So they knew the profit margin would be slim. Does that make them stupid or just complicit in the manipulation of the people or community. I think that so long as the company turns a profit they should honor their commitment to the people and community. Put on your cooperate big company undies and do the right thing for everyone. A profit is a profit and supports the bottom line, the cooperate, and the shareholders. This is a case of simple greed by the board of directors.
they come into town put the mom and dads businesses out of business then leave why because there not making a million a day on there store maybe only a half million a day thats why i don’t shop at walmart ill go to smiths ,Kmart or the local stores
THEY CAME IN AND RAN ALL THE LITTLE LOCAL GUYS OUT OF BUSINESS BECAUSE THEY COULD NOT COMPETE WITH PRICES….NOW THE LITTLE GUY CAN’T AFFORD TO COME BACK IN AND WALMART IS PULLING OUT. DEVASTATING!
First you are saying about how many new stores they plan to open, And my info. says most of the stores they are closing are those new stores in Yes Small towns. (these stores were designed wrong as they put them in small towns that 50% of the population is old and they did not put in scooters and the iles were too narrow and the gondolas were to tall. I would have done the same thing and most all these towns do have other stores in them.
WalMart comes into small towns and wipes out existing stores with their selection and lower prices. Then even though they are continuing to rake in enormous earnings from their stores across the country they decide to pull out of small towns to build more stores in more profitable areas. They claim to care so much about the communities but that gives way to the almighty dollar and profits. Jobs and services both leave a community.
Walmart has been abusing and ripping off its own employees for years, why would anyone be surprised that they would screw over towns where they have driven local businesses out of business. Fortunately, there is an answer.
That is Walmart’s MO.
Business is business. A company can’t continuously loose money. They are not a charity. Unfortunately, people get hurt. But WalMart did offer to relocate employees or give them a good severance package. Most other businesses would just close their doors and walk away. ie JPL in Ohio and many more.
Hopefully the old grocery can re-open. But remember, these folks are Americans and they are small town Americans and these people are resilient;
Walmart is everywhere, and everywhere they are, they have taken down small businesses and put families that owned those businesses out of work. Did some of them actually go to work for Walmart because of this. I suppose it happened! And now if some of those Walmarts are going out of business, and those people also worked for them? What the heck? And what about all the people who originally bought from the small business owner that was put out of business by Walmart? They also lose, because now there is no where to go shopping. I do not shop at Walmart and there ya have it. Pack of rats ever since the original owner died and they started selling crap from China.
Walmart have always treated their staff appaullingly. Any mention of a Trade Union will get them investigate and maybe fired. Don’t be fooled that Walmart are any friends of the average working American.
Shame on you Wal-Mart for bringing hardship to these small towns just for profit……….think we should boycott you…….
used to work for walmart, only the top management made any money. their bonus plan was a joke! I made more money picking up the change I found out in the parking lot at night while bringing in the shopping carts than I ever got when and if we got a quarterly bonus!!! We could see this coming enough before they brow beat the small towns into letting them come in…. thank your civic leaders for letting this happen!!! recall or fire any that were involved…
Because small towns are never a profit for places like Walmart or the government. That’s why they like t build highways around them!!!
Walmart did not put Pettit’s out of business, those of the People of this town who chose to put their faith in a mega-corporation put their only other grocery store out of business. Now these people have a chance to use the shell of the former walmart (they don’t deserve a capital letter, in my opinion) to begin to rebuild. They could market themselves as “The town that rebounded with stunning success (assuming they are able to accomplish that) after being abandoned by walmart.”
This has nothing to do with Walmart’s “profits.” Stop and think, considering the muslim-marxist-antiAmerican operating out of the White House and his relationship with the Walton family, what the big picture plans are for those locations. (huge warehouse size buildings on multiple acres of parking lot surrounding each building)
Walmart Is OWNED By China BTW!!
I’m a Walmart employee. Unfortunately. It was not by choice. I needed a job badly and it was the only place hiring at the time. I live with my 70 year old mom. We barely get by with her retirement and what little I get paid. Walmart had me working 40 hours a week and I was still only a, “part time” worker. Meaning I can’t get benefits. And every once in a while, like for the past 3 weeks, and right before Christmas they cut my hours back to only 27 a week! I’m doing my best to find something else but here in Vegas jobs are difficult to come by. I’m trying to get into the post office but it’s been difficult finding any open positions here. Now I hear about the closures and it just makes me sick. I know of at least one store they are closing here in Vegas, but at least, I think, the workers there can get transferred. I feel bad for the small towns like the one in Texas. I hope things work out for them.
Shame on anybody that shops at walmart and therefore supports the chinese takeover, where is your American pride?
You were the first to bitch when Walmart showed up now you’re the first to bitch they are closing stores because a $15/hr minimum wage is REDICULOUS!!! What did you expect to happen???
They open & help people stretch their hard earned cash then abandon us!!!!!