Why Walmart got rid of overnight shopping

Overview

Walmart’s late-night, 24/7 shopping model—common in the U.S. since the late 1980s—ended in 2020 and hasn’t been brought back, even after the pandemic. The commentary explains why Walmart built late-night stores in the first place and why resuming the model likely wasn’t financially worthwhile.

Background: Walmart avoided groceries at first

• When Walmart launched in 1962, it largely avoided grocery because:
  • Grocery has low profit margins
  • Grocery involves high waste/expiration rates (e.g., produce, baked goods, and canned goods are discarded at notable rates)
• Profit comparison from the commentary:
  • ~1.5% margin on grocery
  • ~20–30% margin on higher-ticket items such as televisions, refrigerators, and lawnmowers

Shift to grocery—and the rise of Supercenters

• During expansion (starting in the 1970s), Walmart realized people would shop grocery frequently (claimed average 83 grocery trips per year).
• Walmart began selling low-margin, fast-moving grocery items (like soda and canned goods) at lower prices to:
  • Bring customers in regularly
  • Increase sales of higher-margin non-grocery items
• This strategy reportedly grew to about ~40% of revenue by the late 1980s.
• In 1988, Walmart launched the first Supercenter (described as a 220,000-square-foot store in Kansas).
• Because these stores were so large, they required overnight stocking, which created a practical foundation for 24/7 shopping.

Why 24/7 made sense during America’s changing workforce

The video argues Walmart adapted to social and economic trends that increased demand for late-night options:

• More women were working full-time:
  • 37% in 1962 to 57% by 1988
• Growth in truck driving meant more people needed to rest at night, and Walmart could use its parking lots to serve truckers.
• More people worked overnight:
  • 15% in 1975 to 23% in 1988
• Over time, late-night grocery needs (e.g., diapers at 1 a.m.) became part of Walmart’s role, contributing a stated ~3% of total Walmart sales.

The core reason given for ending it

The video says the overnight model never became truly profitable due to:

• Overnight labor costs
  • Overnight employees reportedly earned ~15% more on average
  • That wasn’t offset by only a ~3% sales lift
• Higher insurance/accident risk
  • Accidents were more likely at night, increasing insurance costs
• COVID-era justification and closure
  • Walmart used COVID as part of the reasoning after which the practice ended and was never returned or planned for reintroduction.

Presenters or contributors

• Charles Perales