Walmart Inc. will shut down Store No. 8, the big-box retailer’s startup incubator and innovation hub, the Wall Street Journal reported on Friday. It’s the latest move by a retailer to trim expenses and protect profits as shoppers continue to grapple with higher prices.
Chief Financial Officer John Rainey told employees in a memo that much of what Store No. 8 did had already been incorporated into the company’s operations as a whole, the Journal said.
“We’ve graduated capabilities from this operating approach that are now fully embedded in our organization,” Rainey said in the memo, according to the Journal.
“The responsibility to shape the future of retail is now shared by all segments,” he continued.
Walmart launched Store No. 8 in 2017 in an effort to experiment with new ideas, including augmented reality, artificial intelligence and new ways of delivering products, and to stay nimble in a retail landscape increasingly defined by online shopping. The Journal said that Scott Eckert, who led Store No. 8, was leaving the company.
Walmart did not immediately respond to a request for comment. Shares were up fractionally after hours, after finishing 0.5% lower during the day.
Some analysts think that Walmart could hold onto the higher-income shoppers it attracted over the past two years of high inflation. But in a possible sign of its priorities, the retailer on Thursday announced pay raises for store managers and a bonus program that hinges more on store profits.
Walmart and other retailers have signaled that they are rethinking what technology to invest in and what stores to keep open. Those decisions would follow years of online-sales adoption, pandemic-related disruptions to shopping and a jump in prices for basics that began in 2022 and led people to shy away from buying things like laptops and clothing.
Elsewhere on Thursday, Macy’s Inc. M said it would lay off corporate staff and close a handful of stores amid efforts to adapt to “an everchanging consumer and marketplace” and “evaluate the right mix of on- and off-mall locations.”
The Wall Street Journal, which first reported that news, said Macy’s intended to bring more automation to its supply chain and invest “in areas that impact consumers,” like visual displays in stores and efforts to smooth out the online-shopping experience.
CVS Corp. CVS, meanwhile, said it would close some pharmacies at Target Corp. TGT stores as it pivots toward health services.