Wal-Mart Stores Inc. will start closing some of its 24-hour supercenters for at least a few hours each night, aiming to use the time to better stock shelves and organize stores for the peak shopping rush.
The move will affect about 40 stores, including those in Philadelphia, New Jersey and Maryland, beginning next week, said spokesman Brian Nick. About two dozen 24-hour locations already had their hours reduced this spring, and more stores are slated to go through the process later, he said.
The change is a sign of retreat for a company that helped bring convenience and all-hours shopping to many parts of America. Chief Executive Officer Doug McMillon is taking the step as part of his drive to improve the shopping experience at Wal-Mart’s U.S. stores, where customers have complained about empty shelves, long checkout lines and poor-quality produce. McMillon has already raised starting wages and cut a layer of management in stores to try to improve the situation.
“Based on a recent review of our customers’ shopping patterns, we have made the decision to adjust hours at some of our stores,” Nick said. “This is the kind of decision we make on a store-by-store basis and will allow us the ability to reallocate resources to serve our customers during peak shopping hours.”
Customers were notified about the change with signs at the entrances of the affected stores.
In New Jersey, at least three 24-hour Wal-Mart supercenters near New York City, including one that opened in April, will start closing from midnight to 6 a.m. on July 26. Employees at those stores said they were surprised by the move since they are often busy during those hours.
Most employees who had been working the overnight shift will stay on to help with stocking and prepping the store for the daytime hours, Nick said. Overnight cashiers and other employees whose jobs will no longer be needed will be offered new positions within the store or at other locations. Those who choose not to relocate or take a new job will be offered severance if they have been with the company more than a year and work full-time, he said.
The move could have other benefits, like reducing theft, though that wasn’t the reason Wal-Mart changed the hours, Nick said. The Bentonville, Arkansas-based retailer has more than 4,500 stores in total across the country, along with 650 Sam’s Club locations.
Wal-Mart has been trying to reignite growth at its U.S. stores, which make up more than half of its almost $500 billion in annual revenue. The retailer disappointed investors earlier this year when it lowered its annual sales forecast, citing currency fluctuations and wage increases. After boosting pay to at least $9 an hour in April, Wal-Mart plans to raise wages to $10 an hour by next February.
Wal-Mart shares have fallen 15 percent this year. The stock rose less than 1 percent to $73.16 on Wednesday in New York.
Brian Yarbrough, an analyst with Edward D. Jones & Co., said he’s skeptical the overnight closures will significantly improve workers’ ability to stock and prep the stores. Rather, he thinks it may be a trial run to see if Wal-Mart can reduce overhead by cutting store hours without losing sales. Since few other retailers are also open 24 hours, customers may just shift their shopping to when the store is open rather than take their business elsewhere.
While the change may frustrate night owls and parents who need to buy diapers at 3 a.m., it’s not clear how much demand there is for 24-hour shopping.
“I question if it is a test and could become a national rollout,” Yarbrough said. “There aren’t that many shoppers there overnight. How many people are going to Wal-Mart at 2 in the morning?”