The conventional wisdom is that Kmart’s implosion will be to Wal-Mart’s gain. The shutting down of 271 Kmart discount stores and 12 Kmart Supercenters, will all be to Wal-Mart’s gain. In fact, Wal-Mart has even indicated some interest in grabbing up the dead Kmart locations (to build new stores, of course). But if you look at the Kmart closings of these “underperforming” stores from the perspective of the economy — not the company — then you realize that the loss of 284 stores across 40 states and Puerto Rico, and the loss of 22,000 jobs, is a major offset in the economic “gain” that Wal-Mart claims for the economy. In fact, the shut down of 284 stores nullifies the “growth” of nearly 3 years of Wal-Mart stores, and the destruction of 22,000 jobs means that the next 50 supercenters that Wal-Mart builds will have no new NET impact on the economy. Kmart, of course, describes these losses as “enhancements” to its cash flow by nearly $550 million this year. But it will hurt the cash flow of 22,000 families, plus the secondary impacts it will have on businesses located in malls or nearby locations, and other businesses that depended on providing professional services to Kmart, everyone from local newspapers to cleaning services. Kmart said in a press release that “we deeply regret” the impact of these store closings on its workers, its customers and “the communities where these stores are located.” The states which are double-digit losers are Texas, where 33 Kmarts are closing, 21 in Illinois, 18 in the corporation’s home state of Michigan, 16 each in California and Florida, 14 in Georgia, and 10 in Ohio. In 2001, Wal-Mart had a net gain of 102 stores. So the closing down of 284 stores equals the net impact of about three years of Wal-Mart unit openings. Talk about growth for growth’s sake — all this activity appears like development, but in fact is providing little or no benefit to our economy, and harm to 22,000 families in the process.
For a list of Kmart store closings by state, contact [email protected]. For more information on job losses due to big box closings, search this database by “Montgomery Ward” “Caldors” or “Service Merchandise” as examples.
