Sunday, January 17, 2016

In Walmart Store Closings, Texas Loses Out Far Worse Than California

Wow!  Nine are in Ca. Twenty nine in TX! That's going to hurt!

24/7 Wall St. has been covering Wal-Mart and covering wage and employment issues for years. With California and Texas each being massive economies with large populations, it turns out that the lower-cost base of Texas with lower wages and lower taxes is not protecting the state from losing stores versus California (nor versus elsewhere for that matter). Of the 154 U.S. closures, some 29 closures are in Texas alone - versus 9 closures in California.

Logic might have suggested that Walmart's consideration would be areas where it has higher wages and operating costs. After all, California real estate, wages and regulations are generally deemed to be less business friendly than Texas. And the pressure for that $15 per hour keeps coming from outside groups in many industries, and has a much better chance of being seen in California than it does in Texas. That turns out not to be the case here, at least not in raw numbers of store closures.
That isn't what logic says.  Logic includes stores with FLAT OR DECLINING SALES.  With frackers shutting down all over West Texas, Walmart sales are taking a hit. Dallas, Houston and Austin are where all the support personnel are located.  This isn't brain surgery.

My prediction:  Expect more Walmarts in CA to close as this recession moves on.

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