Thanks for Visiting!

Register for free to get the full story.

Sign Up
Already have a account? Log In

Why Is Walmart Closing Stores? A Data Deep Dive

Zohar Bar-Yehuda
June 4, 2019
Why Is Walmart Closing Stores? A Data Deep Dive
  • Mobile data shows that not all store closings are the same
  • Top retailers are leveraging location analytics to maximize their store sites
  • True Trade Area data - the places where audiences actually come from - is critial for market planning efforts
  • Analyzing companies like Walmart and IKEA can indicate the trends that are strengthening offline retail

Walmart’s Closing Stores

Walmart has come under fire of late for announcing a series of store closures around the United States. Many of these closings have come from the Neighborhood Market brand focused on groceries, but several closures have come from Walmart’s flagship Supercenters.

While closures have become a frequent story in a changing retail environment, there is something uniquely interesting about a brand as strong as Walmart closing its signature stores.

To understand the situation better, we dove into location analytics to unpack the decision making and what it could potentially indicate moving forward.

Limited Reduction in Traffic

One of the first stores to have their closure announced was a Walmart Supercenter in Dallas, Texas. In a normal situation, one would expect to see underperforming stores suffer from a significant drop in foot traffic. Yet, the Dallas location was actually operating at fairly normal levels. The graph below shows weekly foot traffic to this location beginning in the first week of June 2017 until May 2019 when the store shut down.

Wider numbers also don’t align with a weak performer as the store enjoyed over 450,000 visits in Q1 2019 alone from over 150,000 visitors. So, not only are people coming to the store, they are coming frequently. Furthermore, comparing this branch against all Walmart Supercenters in the US, it is ranked at the 86th percentile in terms of foot traffic in Q1 2019, with traffic that’s almost 50% higher than the ‘average’ Walmart Supercenter:

Combining this activity with the rise of Buy Online Pick-up In Store, and it is surprising to see these locations shut.


One possible answer comes from a risk that every major chain faces - cannibalization. Walmart’s strength has led to a rapid expansion of stores throughout the country, that in some cases, ended up putting stores into direct competition. For example, looking at the True Trade Area for the same Dallas location compared to two other nearby Walmart Supercenters highlights the challenge that the store faced. It was competing directly with two other centers with an almost complete overlap of customers. This means customers weren’t choosing whether or not to go to Walmart, but which Walmart to go to.

This factor was also substantial for two locations in Louisiana where a closed store - a Walmart Supercenter in Lafayette -  saw their audience overlapping almost completely with a Walmart Supercenter in nearby Carenco.

In short, Walmart is not undergoing some shocking reduction in brand value or customer loyalty, but customers are being served by multiple locations. The result is that a specific Walmart Supercenter’s biggest competitor turns out to be another Walmart Supercenter.

Why Does This Happen?

It is easy to look at cannibalization as a simple error to overlook, but in reality, the data available to retailers has been severely limited. Most are forced to make do with trade area data that focuses on the simple breakdown of a 3,5 or 7-mile radius. Yet, the reality is that customers are not limited to an arbitrary circle and are more likely to follow specific travel patterns based on traffic flow, proximity to workplaces and a myriad of other factors. As a result, major chains are often forced to make decisions in a deep fog leading to costly mistakes.

Can It Be Done Better?

Another question is whether cannibalization is simply guaranteed and unavoidable. But analyzing other top brands shows that market planning optimization can be achieved.

Take IKEA as an example. In the Greater Los Angeles area, there are four IKEA locations that surround the city. Each sells the same products, each offers the same level of service and each has a near identical rating on Google - three with 4.4 stars and the remaining with 4.3. But IKEA’s brilliance doesn’t lie in a fundamental difference within the store, but in the absolute perfection of the distance each property has from the other stores.

Even when accounting for 80% of overall visits over a 6 month period from late 2018 to mid-2019, the cannibalization between stores is almost non-existent. For the IKEA customer, it is obvious where they should go, because there is an ideal location and then there is everything else.

The result is an optimization of a region that helps each store maximize its area while enabling IKEA to grow at a sustainable rate.

Walmart’s Supercenter Path

To analyze Walmart’s situation further, we dove into several other locations where multiple Walmart Supercenters sit in relative proximity. The map below shows the True Trade Area of several locations around Fort Meyers, Florida. The locations marked with Blue and Red symbols see almost perfect delineation based on natural borders. Interestingly, while one section of the Red property’s trade area is untouched, it does have significant overlap with the property marked in green further East.

Could this indicate a value in relocating the Green site further to the East? Potentially. However, the separation of the sites marked in blue and red show the impact of optimizing location. Even though the sites are close in terms of distance, the natural barrier keeps cannibalization to a minimum.

The problem of cannibalization comes into greater focus as one moves north to another grouping of three Supercenters in the area of Bradenton, Florida. The three properties all have strong overlap, with the primary culprit coming from the location marked in Red. If you were leading Walmart’s market planning division and looking to maximize the value of each store, wouldn’t this be the ideal site to relocate? Audience patterns indicate that the other stores would effectively serve this market and costs could be limited.

Conclusions - The Rise of Offline Optimization

Not all store closures are equal.

Many brands are only now beginning to utilize tools that enhance their visibility and understanding of customer engagement. As a result, many actions - like store closings - need to be seen more as a reaction to new and accurate data than a decrease in brand value.

The impact of data-driven approaches that leverage location analytics cannot be overstated. It adds a powerful level of capabilities to large and small retailers alike looking to maximize their impact. Where digital companies have leveraged data to optimize their activities, the rise in solutions like has given companies the ability to deploy similarly data-driven approaches to the offline world.

Especially in the scope of the wider debate around the demise of brick and mortar retail, data like this can empower offline retailers to thrive in a changing retail landscape.

Get 3 brand & industry
breakdowns every week

Subscribe to the newsletter

Great! Prepare your inbox for data-driven insights...
Oops! Something went wrong while submitting the form.

Get a Demo

Please enter your first name
Please enter your last name
Please provide a valid email
Please enter your email
Please enter company name

Thanks for reaching out!

One of our experts will be in touch soon

Try Free
Oops! Something went wrong while submitting the form.
Small Coffee Chains Brewing Big Success White Paper Recap – November 2023
Thanksgiving Travel 2023 Recap
Checking in With Nike and Lululemon
Black Friday 2023 Retail Recap
Starbucks’ 2023 Holiday Menu & Red Cup Day Performance
Turkey Wednesday 2023
Who Attended the 2023 Pickleball Championship? 
Three Surprising Holiday Shopping Trends
What’s in Store for Ulta Beauty This Holiday Season?
Best Buy and Department Stores: A Holiday Deep Dive
Discount & Dollar Stores: Strength Toward The End of the Year
The State of Off-Price Retail: Discounts Seal The Deal
Placer Mall Index Recap: October 2023 Office Index: October 2023 Recap
Retail Corridors Ahead of the 2023 Holiday Season
California, Here Gap Comes
Checking in With Home Improvement
Getting Into the Glasses Game: Warby Parker Takes Over
Fitness Positioned for a Strong 2023 Finish
White Paper Recap: October 2023
Coffee Giants Brewing Up Business
Popeyes and Burger King Lead the Way
Diving into Yum!
Looking Ahead to Black Friday 2023
Blockbusters Drive Movie Theater Comeback
Crocs and Boot Barn: Shoe-Ins for Success
McDonald’s and Chipotle's Winning Recipe
The State Of Steak: Checking in With Texas Roadhouse
Pleasant Pastimes: Pickleball Potential Proves Potent
Who’s Driving Downtown Manhattan’s Weekend Revival?
Diving into Downtown Manhattan Foot Traffic Trends
Rite Aid: Rightsizing Right
Major League Soccer: Its Die-Hard and Casual Fans
The Anchor Recap: September 2023 Office Index: September 2023 Recap
Placer Mall Index Recap: September 2023
September White Paper Recap
The Consumer Habits of College Students
JCPenney: Rightsizing and Revitalizing
Pent-Up Demand Ahead of October Sales Events
4 Strategies Retailers are Using to Drive Traffic to Their Venues
5 Key Regional Grocery Players Impressing in 2023
Upscale Kitchenware Trending Up
Costco Finds More Room for Growth
Four C-Store Chains Making an A-Grade
National Parks + Outdoor Summer Activities
Diving Into Darden: Summer 2023 Update
The Summer Event Effect
Messi: Massive in Miami
Looking Back on Back to School 2023
The Anchor Recap: August 2023 Office Index: August 2023 Recap Mall Index: August 2023 Recap White Paper Recap: August 2023
Starbucks Pumpkin Spice Latte Strikes Again
Big Scoop: We All Scream For Ice Cream
Sports Away: Lululemon & Nike’s Momentum Continues
Summer Visits Heat Up For Recreation and Outdoor Gear Chains
No CSS overwrite - July 2023 Office Index Recap
Staging - August 2023 Mall Indec
Mid-Atlantic Grocery Deep Dive
Experiential Chains Heating Up This Summer
Petco Goes Big by Going Small
Ulta Beauty: Leading the Discretionary Pack
Discount and Dollar Chains Continue to Thrive
Summer of Sports: DICK’s Sporting Goods and Hibbett Sports
Off-Price: Succeeding Into Summer
The Anchor Recap: July 2023
Superstores Maintaining Pandemic Gains Amidst Economic Headwinds
2023: Home Improvement at the Halfway Point
July 2023 Office Index Recap Mall Index: July 2023 Recap
The Taylor Swift Visit Lift
Southwestern Grocery Dive
July 2023 White Paper Recap: Halfway Point Review & Quarterly Index
Yum! Brands: Driving Dining Visits
Slurpees and Summer Movies Stimulate Consumer Foot Traffic
Cool Beans: Summer Coffee Update
Checking In on Back to School 2023
Crocs and New Balance Tip The Scales
Burger Bliss: Shake Shack and In-N-Out Stacking Visits
Chipotle & McDonald's Continue to Reign Supreme
Vibenomics and Partner to Enhance Retail Media In-Store Measurement
California Grocers Here We Come!
Marriott’s Different Audiences
Bonchon and Kura Sushi Thrive in the Fast-Casual Scene
A Shoe In: Footwear Climbs to the Top
Cheers! Raising a Glass to Beverage Retail Office Index: June 2023 Recap Mall Index June 2023 Recap – A Turn of the Tide and a Dive into Open-Air Lifestyle Centers
Local Kitchens: Redefining the Restaurant
Unlocking Urban Insights: The Value in Manhattan’s Employees
Ohio State Parks On The Rise
How is Inflation Impacting the High-Income Shoppers?
Five Fast-Growing Dining Chains
What To Expect From Prime Day and July Sales Events in 2023
The State Of Fashion: How Are Apparel Retailers Faring in 2023?
2023’s Latest Dining Success Story: GEN Korean BBQ House
The NBA Finals: A Location Intelligence Perspective