Walmart to shutter underperforming Irvine supercenter in March - OCRegister

An underperforming Walmart Supercenter on Technology Drive will close March 5, the retailer said Monday.

Walmart said all 250 employees at the 136,000-square-foot store near Irvine Spectrum Center would have the option of transferring to a neighboring Walmart. The company operates six other locations within a 15-mile radius, including another supercenter at 16555 Von Karman Ave., also in Irvine.

Employees who choose not to transfer to another store will be paid through May 7.

“Closing a store is never an easy decision,” company spokesman Charles Crowson said Monday. “We have a series of criteria that we judge our stores on. We look at a lot of factors.”

The Walmart Supercenter in Irvine on Monday, February 1, 2021 will be closing its 136,000-square-foot store at 71 Technology Dr. in Irvine on March 5. (Photo by Leonard Ortiz, Orange County Register/SCNG)

What fuels closures?

Crowson declined to reveal what those factors are, but Burt Flickinger III, managing director for the retail consulting firm Strategic Resource Group, provided some insight.

One of the factors that typically fuels a closure, he said, is lower foot traffic. Another is “shrinkage,” an industry term for loss of merchandise or shoplifting. In California, shoplifting items valued up to $950 is considered a misdemeanor, punishable by up to six months in county jail.

Flickinger also noted that many Walmart stores open with the support of tax incentives from the communities they serve. The incentives typically last 10 years, he said, and once they run out, some stores close. The city didn’t provide any tax incentives for the Irvine supercenter, which opened in 2012

Officials with Irvine Co., which owns the Irvine building, could not be reached to say what plans it may have for the building once it becomes vacant.

“No one at Irvine Co. has decided who might take over that spot,” Irvine Mayor Farrah Khan said Monday. “They may re-imagine it as another big store or break it down into smaller spaces.”

Walmart’s Crowson acknowledged that some employees will likely choose not to transfer to another Walmart location.

“Some will transfer and some won’t,” he said. “Some employees may be at a point in life where they are ready to retire. Regardless, we want to give all of the associates a chance to stay within the Walmart family.”

He said the store’s pharmacy will remain open through Feb. 19.

Retailers facing challenges

Retailers with a large brick-and-mortar presence have, in some cases, downsized their physical footprint and placed an increased focus on e-commerce in an effort to compete with Amazon and other robust online businesses.

Flickinger said retailers have also been saddled with “massive increases” in shoplifting in recent years, adding that items like batteries, razor blades and cosmetics are easy to steal. That — coupled with expiring leases and tax incentives and increased costs associated with COVID-19 safeguards — will ultimately put many out of business.

“We’re going to see hundreds of stores closing in California over the next two years,” he said. “When you look five years out … it will be well over 1,000 closures.”

Temporary closures

Walmart initiated the temporary closure of several Southern California stores over the past few weeks so third-party cleaning crews could sanitize the buildings to help curb the spread of COVID-19.

Stores like Walmart are typically closed when employees test positive or are exposed to COVID-19, although the company has declined to provide details, citing privacy concerns.

Walmart operates 310 stores in California, including standard-sized big-box stores, larger supercenters, smaller Neighborhood Markets and Sam’s Club locations. They employ roughly 91,000 employees.

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