The 4 States Killing Walmart

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At the end of January, Wal-Mart Stores Inc. (NYSE: WMT) had 4,837 stores across all 50 U.S. states and the District of Columbia. That is 44% of Walmart’s global total, and those Walmart and Sam’s Club stores generated 71.1% of the company’s net sales for the fiscal year that ended in January 2014.

Based on a total U.S. population of nearly 317 million people, there are 1.5 Walmart stores for every 100,000 people in the country. But where those stores are located is a problem Walmart needs to overcome if it is going to post sales growth in the American market. In four large population states, the number of Walmart stores per 100,000 people is about half or less than the 1.5 national average. Unless Walmart can boost its market penetration in these four states, the company will continue to stagger as it tries to increase revenue.

In New York, Walmart operated 117 stores at the end of its 2014 fiscal year in January, or just 0.6 stores per 100,000 population. There are nearly 20 million people living in New York state and more than 8.4 million in New York City alone. The company operates no stores in New York City, where the city council recently sent Walmart a letter telling the company to stop donating money to the city’s charities. Even ignoring New York City, Walmart still operates only about 1.0 store per 100,000 population in the rest of the state.

Walmart operates 284 stores in California, ranking the state behind only Texas (499 stores) and Florida (319 stores). But California is the most populous state in the country, with more than 38 million people, and just 0.7 Walmart stores per 100,000 population. A Walmart Neighborhood Market opened in Los Angeles’s Chinatown last September, joining the city’s only other Walmart store, which is located on the city’s south side. San Francisco, like New York, essentially has banned the company from moving in, and there are just four stores in San Diego, the state’s second largest city, or about 0.3 stores per 100,000 people.

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The 14th most populous state in the country is Massachusetts, and Walmart can claim just 0.7 stores per 100,000 population in the state. The state is home to 6.7 million people, of which about 4.5 million live in the Boston metropolitan area. There are a mere 50 stores in all of Massachusetts, and Boston has no Walmart stores, although there are about 15 or so in the surrounding area. Residents in Boston’s suburban city of Somerville even rejected a smaller Neighborhood Market over the support of local government officials. In a survey last year, most Boston residents would rather see a casino in their city than a Walmart.