Consumers in California are going to potentially have to find a new grocer for the monthly stocking up of their pantries as Walmart is set to close down several more locations in the state. This shuttering of stores comes hot on the heels of a recent decision to close fifty-one health centers and eleven stores — five of which where located in California — in December of 2024. With more Californian branches slated to close in 2025, the big box retailers appears to be on a path that will cause it to cease to exist entirely in the state. At the moment, the cost of living is simply too high for consumers to shop regularly, even for essentials and retailers across the industry are taking a hit — not just Walmart.
Why is Walmart closing more of its stores in California?
Simply put, consumers just do not have enough disposable income leftover after covering bills, rent, and basic food essentials in these tougher than usual times. Inflation rates are exorbitant, not to mention the president’s recent decision to raise tariff fees on goods imported from China, Mexico, and Canada — which is predicted to cause a chain reaction that ends with the overall cost of things increasing even more than it already has.
These truly are uncertain times for consumers and retailers alike and as such almost every retail company is having to scale back on its retail footprint, or worse, file a petition for bankruptcy due to underperformance.
The case is the same for Walmart who is one of the largest retailers across the country and yet the seemingly no longer popular big box retailer is now compelled to close down several stores in one of its most important states, California. The company is citing disappointing financial performance as the main driving force for this decision.
Factors like higher costs of living, and inflation have been impacting the company’s overall performance and as a result, the company is having to re-evaluate its strategies and restructure its business model so as to not get swept away in the wave of e-commerce.
It is also reported that approximately 1,500 employees will be impacted by these closures. Employees from the shuttered stores will be given the option to transfer to another location or, alternatively, they may request a severance package.
Other impacting factors
In part, the underperformance reported by the company may not only be a result of external economic factors. The retailer recently announced that it will be giving in to pressures from conservatives and as such, the company will no longer be enforcing its Diversity, Equity, and, Inclusion policies. As one would expect, shareholders and customers alike were enraged by this decision. As a result, there is a possibility that customers are opting to shop elsewhere because of this.
Whilst Walmart is not alone is axing its DEI policies, there are other companies, like Costco, who remained steadfast in the implementation of their DEI policies. Customers, especially recently, have become a lot more intentional about where they shop and whether or not the values of these companies align with their own. The decision to discontinue DEI practices will have likely lost this retailer an entire cohort of customers.
List of branches set to close in California
- San Diego – 2121 Imperial Avenue, San Diego, CA 92102
- El Cajon – 605 Fletcher Parkway, El Cajon, CA 92020
- West Covina – 2753 E. Eastland Center Dr., West Covina, CA 91791
- Fremont – 40580 Albrae Street, Fremont, CA 94538
- Granite Bay – 4080 Douglas Boulevard, Granite Bay, CA 95746
California and Georgia are the states that will be impacted the most from these closures as these two states have the highest concentration of stores across its respective territories. These closures do not mean that the company is on the brink of bankruptcy, but rather, it is a strategic restructuring to shift focus towards bettering branches that are performing well.