Walmart and CoStar Corp. announced Wednesday they will close their grocery stores by Thanksgiving, ending a two-decade history of grocery store closings that have drawn criticism from some consumers.
The move by Walmart follows a plan Walmart CEO Doug McMillon outlined last year to cut grocery sales by more than 20% to balance its $1.4 trillion U.S. business.
The company said in a news release that the decision to close its stores on Thanksgiving would save the company “more than $3 billion.”
Walmart said the stores would remain open for employees to make purchases and deliveries, but it would shut them for employees who have been employed since December to accommodate holiday shopping season.
Walmart will pay $3.3 billion in back wages and benefits to employees who worked at its stores from October through the end of the year, the company said.
It said it also will make payments of up to $1,000 per employee per week to the Department of Labor, including $300 million to help with medical care and $150 million to pay for the cost of the closure of the stores.
Walmart said it expects to reduce its annual labor costs by as much as $400 million in the coming years.