Walmart (NYSE: WMT) has announced it will be closing 63 of its Sam’s Club locations across the U.S. The company released a statement saying, “After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.”
Some of the stores have already shut their doors. The company said that some of the other stores on the list will close within weeks. The company has not released a list of the stores that will be closing. Since fiscal 2013, the company has only closed five wholesale club stores.
The abrupt shuttering of local stores in Texas, Georgia, Washington, New York, Indiana, New Jersey, Alaska, Ohio, and Louisiana angered many in those communities. Local media outlets in some areas are saying that employees weren’t notified in advance. Some employees in Houston claimed that they didn’t know about a closure until they showed up for work that day.
Sam’s Club has not said how many employees are losing their jobs. However, each of the company’s warehouse stores has approximately 175 employees, meaning over 11,000 people could be impacted by the closures. Ten to 12 of the closed stores may be converted to e-commerce facilities, according to a company spokesperson.
Some upset customers have asked to have their memberships refunded. Others have worried about picking up prescriptions from the closing stores. A statement from the company said, “Pharmacies will stay open for at least two weeks, and we will work with each state’s Board of Pharmacy to help guide this transition.”
The move to close the warehouse stores is not entirely surprising. In recent years, Sam’s Club has faced strong competition from rival Costco and has generally underperformed relative to Walmart. The company saw same-store sales growth begin to slow in the first half of fiscal 2018.
The news comes just after Walmart recently announced that its savings from new tax legislation would be used to raise employees’ starting wages and offer bonuses to staff, including Sam’s Club’s employees. The improved benefits included raising employee wages from $9 to $11 per hour, expanding maternity and parental-leave benefits, and offering employees a one-time cash bonus of up to $1,000.
Roughly 1 million U.S. employees are expected to benefit from the changes. The company said in its statement that all Sam’s Club’s employees affected by the store closures will still be eligible for bonuses.