The first knock on Walmart was that it gutted the mom-and-pop businesses of small-town America. So what happens to those towns when Walmart decides to leave?
What is the future of American retail? The keys might be found not only in the highly contested affluent urban areas but also in the countryside, which is often looked down upon and ignored in discussion of retail trends.
Yet these small towns, as well as middle- and working-class suburbs, have produced many of the dominant trends in American retail, from discount chains to super-stores. So, too, could these communities create a new trend, as some of the former innovators, such as Walmart, have begun to close stores, leaving some towns and villages bereft of convenient, affordable retail.
This year the world’s largest retail chain announced it was closing 154 stores, most of them “express” centers and other smaller stores that serve primarily small-town and urban markets, such as Oakland, California. The effect has been worst in poorer towns, notably in the Southeast and Appalachia, where there is little alternative retail in place.
Walmart’s move, driven by flagging sales and profits, represents a shift away from the very working-class and small-town customers who drove its rise. It also reflects a growing disinterest among retailers in serving the nation’s beleaguered middle and working classes. One in six Walmart customers, notes one University of Michigan study, received food stamps in 2013, with an estimated average household income of $40,000 or less
In contrast, online shoppers, now a primary focus for Walmart, tend to be more affluent, with 55 percent of e-commerce shoppers living in households with incomes greater than $75,000. As Walmart and many other traditional “brick and mortar” stores have struggled with declining sales, online merchants have enjoyed an average growth of more than 11 percent annually since 2011. In this game, Walmart is clearly playing catch up.
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