Dive Brief:
- Walmart plans this week to shut down a pair of stores in Bentonville, Arkansas, and Lincolnwood, Illinois, that offer only pickup and delivery service, marking the end of a nearly decade-long experiment by the retailer aimed at improving convenience for e-commerce customers, according to a company spokesperson.
- The retailer has also decided to close several conventional locations in Illinois, New Mexico, Florida and Wisconsin, all of which will cease operations by March 10, the spokesperson said.
- Walmart is opting to stop operating stores focused solely on fulfilling online orders for now even as other businesses are investing in the concept.
Dive Insight:
Walmart concluded that, for the time being at least, it no longer needs e-commerce-only stores because the company has added pickup and delivery operations to thousands of full-service locations in the years since the Bentonville store opened in 2014, the spokesperson said.
The retailer has applied what it gleaned about people’s online shopping needs and preferences from the pilot to its overall e-commerce operations, leading the company to make what the spokesperson called a “difficult decision” to shutter the store in Bentonville along with its counterpart in Lincolnwood, which opened in 2019, according to the spokesperson. Both locations will close by Feb. 17, and Walmart “will continue to innovate in our pickup and delivery services to best serve our customers,” the spokesperson said in an email.
The dedicated e-commerce locations that are closing this week are both significantly smaller than conventional Walmart supercenters, which can exceed 200,000 square feet. The Bentonville store, located at 3701 SE Dodson Road in the same city where Walmart’s headquarters are located, occupies approximately 25,000 square feet, according to the spokesperson. Meanwhile the Lincolnwood location, which sits at 6840 N. McCormick Blvd. in the Chicago suburb, encompasses about 41,700 square feet.
Walmart also formerly operated a store offering only pickup in the New Orleans suburb of Metairie, Louisiana, which closed last year, the spokesperson said.
The full-service stores Walmart intends to close next month are in Homewood, Illinois (17550 S. Halsted St.); Plainfield, Illinois (12690 S. Route 59); Milwaukee (10330 W. Silver Spring Drive); Albuquerque, New Mexico (301 San Mateo Blvd SE); and Pinellas Park, Florida (6900 U.S. Highway 19 N.).
The stores were tapped for closure because they “haven’t performed as well as we hoped … our decision is based on several factors, including historic and current financial performance, and is in line with the threshold that guides our strategy to close underperforming locations,” the spokesperson said.
Workers at all of the stores that are closing will be eligible to move to nearby stores, the spokesperson added.
Walmart is moving away from running stores that handle just online orders at the same time several startups have embraced the approach. Those companies include Addie’s, which in January opened a drive-up grocery store in Norwood, Massachusetts, and Opie Drive-Thru Grocery, operator of a pickup-only store located on the site of a former fast food restaurant in Mount Pleasant, South Carolina, that debuted in 2021.
In addition, JackBe, which plans to run a drive-up grocery business in the Oklahoma City area, has raised $3.75 million in seed capital to fund its ambitions.
Fresh Street, another startup, opened a store that only handled grocery e-commerce orders in Chicago last March. The company has moved away from that business, however, and now plans to run a marketplace to connect retailers with food distributors that is set to open this year.
