retail news in context, analysis with attitude

The Washington Post has yet another story about the decision by Walmart not to build two stores to which it had committed there, as part of development jobs designed to provide jobs and shopping options to neighborhoods that desperately need both.

Walmart said that the three stores that it had built in DC have been underperforming, and a "frustrated" DC Mayor Muriel E. Bowser tells the Post that the decision was not driven by cost-cutting but rather by a larger national strategy that includes the paring down of urban markets and smaller stores.

"Bowser’s anguish," the Post writes, "stems from how critical the stores were as the economic underpinning of two complex and expensive projects that have been floundering for more than a decade, leaving residents in poor communities east of the Anacostia feeling left behind while other neighborhoods enjoy a boom in new restaurants, shops and grocery stores. Since 2004, the number of grocery sellers in the District has ballooned from 36 to 55, according to the D.C. Economic Partnership, with three Whole Foods Markets and other new stores on the way.

"Although home to nearly 150,000 people, the two sections east of the river, Wards 7 and 8, still have just two grocery stores."

Meanwhile, the Wall Street Journal reports that one of the results of Walmart's decision to close 154 stores in the US and cut prices on merchandise there by as much as 50 percent has been the purchase of many of these items by people who then turn around, mark them up and sell them on Amazon: "Wal-Mart’s store closings presented a special bonanza," the story says.

"The practice is known as retail arbitrage," the Journal writes. "Thousands of sellers scour store shelves with the aim of scoring narrow margins by peddling their purchases online. Many rely on mobile applications that calculate the profits, after shipping and other fees, that they can expect to make per item on Amazon based on recent online prices. And for some, it’s a big business with millions of dollars in sales, using their own warehouses and staff to process the goods."
KC's View:
I have no problem with closing unprofitable stores, and with adjusting strategies so that the company is more broadly positioned to better cater to a changing marketplace. But ... I have to say that the whole DC thing leaves a bad taste in my mouth. Walmart spent a lot of time pontificating about how community-focused it was going to be, while simultaneously playing hardball about the conditions under which it would open stores. I'd feel betrayed if I lived in DC, especially in a neighborhood that isn't going to get a promised store.