Mar 28, 2023
Walmart’s planned closure of its last two stores within Portland’s city limits later this month has drawn national coverage amid speculation that it may be due to rampant shoplifting.
The discount giant closes a handful of underperforming stores across states each year and the two were part of 15 announced for 2023. Walmart has said that each closure involves numerous factors.
On the Portland closures, Walmart said in a statement to an NBC affiliate, “The decision to close these stores was made after a careful review of their overall performance. 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.”
The closures come after Walmart CEO Doug McMillon commented on CNBC last December that shoplifting spikes across the U.S. could lead to store closures and price increases. Portland has seen a surge in homicides and other crimes, including shoplifting, and the spread of homeless camps following moves by the city in 2020 to temporarily reduce police funding after months of politically-charged protests.
Texas Governor Greg Abbott said on social media about Walmart’s Portland closings, “This is what happens when cities refuse to enforce the rule of law.”
Portland Mayor Ted Wheeler, retorted, “The retail industry is changing and retail theft is a national issue,” while pointing to recent Walmart closures in Texas.
An article in the Oregonian cited a number of other potential factors leading to the exits, including the city’s high taxes, cultural mismatches that Walmart has also faced in other cities, and inflationary/macroeconomic pressures.
Neil Saunders, managing director of GlobalData’s retail division, believes local competition from Fred Meyer and independents played a role. He told the Oregonian, “Walmart typically needs to be where they can be a big player and capture all the shares.”
Portland’s population slid 1.7 percent in 2021 after decades of growth and other businesses have closed in recent years amid the city’s social problems. Last week, Cracker Barrel announced plans to close its three stores in the Portland area, saying it was “unable to overcome the impact of the pandemic.”
DISCUSSION QUESTIONS: How likely is it that high shoplifting rates significantly contributed to Walmart’s decision to close its stores in Portland? Are Portland’s issues similar to or much different than those facing other major U.S. cities?
"To lay this decision only on the shoplifting problem is overly simplistic."
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