A sub-par Walmart Supercenter on Technology Drive in Irvine will close on March 5th, the retailer announced on Monday.
Walmart said all 250 employees at the 136,000 square foot store near the Irvine Spectrum Center would have the option to move to a neighboring Walmart. The company operates six other locations within 15 miles, including another super center on Von Karman Ave. 16555, also in Irvine.
Employees who choose not to move to another store will be paid until May 7th.
“Closing a business is never easy,” said company spokesman Charles Crowson on Monday. “We have a number of criteria by which we judge our business. We look at many factors. “
The Walmart Supercenter in Irvine will open its 13,000 square foot store at 71 Technology Dr. on Monday February 1st, 2021 March 5th. close in Irvine. (Photo by Leonard Ortiz, Orange County Register / SCNG)
What drives closures?
Crowson declined to reveal these factors, but Burt Flickinger III, managing director of retail consultancy Strategic Resource Group, provided some insight.
One of the factors that typically fuel a closure is less pedestrian traffic. Another is “shrinkage”, an industry term for loss of goods or shoplifting. In California, up to $ 950 worth of shoplifting is considered a crime that can be punished with up to six months in county jail.
Flickinger also noted that many Walmart stores open with support from tax incentives from the communities in which they operate. The incentives usually last for 10 years, he said, and once they run out, some stores close. The city offered no tax incentives for the Irvine Supercenter, which opened in 2012
Officials from the Irvine Co., which owns the Irvine building, said the company is “in talks with several top-notch retailers” about the space. The company on Alton Marketplace described the complex as “one of the most sought-after retail centers in the region due to its exceptional highways visibility and prime location next to I-5”.
Walmart’s Crowson acknowledged that some employees will likely choose not to move to another Walmart location.
“Some will be broadcast and some will not,” he said. “Some employees may find themselves at a point in life where they are ready to retire. Regardless, we would like to give all employees the opportunity to stay with the Walmart family. “
He said the store’s pharmacy would remain open until February 19.
Retailers face challenges
Retailers with a large brick and mortar footprint have in some cases reduced their physical footprint and increased their focus on e-commerce to compete with Amazon and other robust online businesses.
Flickinger said retailers have also faced “massive increases” in shoplifting in recent years, adding that items like batteries, razor blades and cosmetics are easy to steal. This – along with expiring leases and tax incentives and increased costs associated with COVID-19 safeguards – will ultimately put many out of business.
“Hundreds of stores will close in California over the next two years,” he said. “If you look outside for five years … there will be well over 1,000 closings.”
Walmart has initiated the temporary closure of several stores in Southern California over the past few weeks to allow third-party cleaners to renovate the buildings to help contain the spread of COVID-19.
Stores like Walmart tend to be closed when employees test positive or exposed to COVID-19, though the company has declined to provide details, citing privacy concerns.
Walmart operates 310 stores in California, including full size big box stores, larger supercentres, smaller neighborhood markets, and Sam’s Club locations. They employ around 91,000 people.