Walmart Inc. is closing four stores in Chicago, halving its footprint in the third-largest U.S. city after years of mounting losses. 

The closings mark a retreat for the nation’s largest retailer, which faces tough competition in Chicago from the likes of Target Corp., Albertsons Cos. and Aldi. Walmart said it had tried and failed to improve its performance by building smaller stores, localizing its merchandise offerings and investing $70 million in recent years on store upgrades, health facilities and a training center. 

Crime and theft, which have cast an unwanted spotlight on Chicago, weren’t leading drivers of the decision, the company said in an email April 11. While Walmart has developed its smaller “Neighborhood Market” format in part for cities, the Bentonville, Arkansas-based retailer has sometimes stumbled in replicating the rural and suburban success of its sprawling Supercenters. For example, it’s never been able to crack the New York City market. 

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“The simplest explanation is that collectively our Chicago stores have not been profitable since we opened the first one nearly 17 years ago,” Walmart said in a statement. “These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years.”

Mayor’s Anger

Outgoing Chicago Mayor Lori Lightfoot called on Walmart to make sure that the communities affected by the closings continue to have a reliable source for essential goods. The company should also work with local communities to repurpose the shuttered stores for new uses, she said in a statement. 

“I’m incredibly disappointed that Walmart, a strong partner in the past, has announced the closing of several locations throughout the south and west sides of the city,” said Lightfoot, who will step down next month. 

“Unceremoniously abandoning these neighborhoods will create barriers to basic needs for thousands of residents.”

Lightfoot has seen several high-profile companies leave the city during her term — most notably Boeing Co. and Citadel. The departures, along with criticism from the chief executive officer of McDonald’s Corp., helped to fuel a perception that the city is losing out to lower-tax locales. 

Still, Walmart’s relatively small footprint in the city was likely part of the decision to pull back. The retailer has far fewer stores in Chicago than its rivals. Target, for example, has 23 locations, while German discounter Aldi operates 33 and Albertsons’s Jewel-Osco chain boasts 37. 

The four Walmart stores, which include three Neighborhood Market formats and one Supercenter, will close by April 16. Employees will be eligible to transfer to other jobs in the company, Walmart said, including to the locations in the city that will stay open. Workers will be paid until August 11 unless they transfer to another Walmart job during that time.   

“The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serving the community,” Walmart said. 

Portland Exit

The company also recently shuttered its stores in Portland, Oregon, spurring speculation in the local press that rising shoplifting was one of the forces behind the decision. Walmart chief executive officer Doug McMillon warned in 2022 that worsening retail theft around the U.S. could prompt store closings. In Portland, the company said only that the locations weren’t meeting financial expectations.

Walmart’s move in Chicago comes on the heels of progressive Democratic candidate Brandon Johnson’s victory in the recent mayoral race. He has proposed higher levies on corporations and wealthier residents, calling for $800 million in new taxes without raising property levies, to deal with the city’s fiscal deficit and invest in residents and neighborhoods across the city. He has argued that wealthier residents and businesses need to contribute more in order to tackle Chicago’s problems, including crime.

His position on law enforcement contrasted with that of his competitor, Paul Vallas, who was endorsed by the police union and called for new police hires. Johnson has proposed a focus on addressing the root causes of crime such as poverty and mental-health ailments.