Deal or No Deal, Wal-Mart Coming to Chicago
It’s a tale of two stories. One told by labor leaders in
Chicago has them finally getting Wal-Mart to sit down and agree to basic principles
that will enable unions to support the retailing giant’s efforts to build stores
in the city. The other is Wal-Mart claiming it has not compromised one iota
and has managed to get previously staunch opponents to step aside as it continues
on its inexorable path to growth in urban centers across the land.
is the truth seems to make little difference because aldermen in Chicago have
voted to rezone land on the south side of the city to allow Wal-Mart to build
its second store in the city. And, by previous accounts, it will be the second
of perhaps dozens of stores the company will open in Chicago.
Tribune earlier in the week, citing Hank Mullany, executive
vice president and president of Wal-Mart’s northern U.S. division, reported
the chain was looking to build dozens of stores, from 25,000 square-feet up to
140,000 square-foot supercenters. The smaller stores –presumably Neighborhood
Markets, although that format typically runs 42,000 square-feet –would be set
up in neighborhoods that no longer have a grocery store.
Mr. Mullany said that
Wal-Mart’s plan for Chicago would "eradicate the
food deserts" within the city and create up to 12,000 new jobs. The unemployment
rate in Chicago was at 10.5 percent in May, compared with 9.7 percent for the
Leon Nicholas, a director at Kantar Retail, told Bloomberg News, "Chicago
could very well be a model for how Wal-Mart expands into urban areas — a multiformat,
localized approach that leverages Wal-Mart’s growing community-relations
skills to capture urban market share. Chicago opens up the opportunity for
small-store urban expansion that they’ve been talking about for a while."
nature of the compromise made (or not made) by Wal-Mart to gain access to Chicago
was that the retailer would pay workers at least $8.75 an hour, 50 cents more
than minimum wage in Illinois, and agree to a minimum raise of 40 cents an
hour for workers who stayed with the retailer for a year. The retailer also
agreed (or not) to use union workers in building its stores in Chicago.
Discussion Questions: What challenges will Wal-Mart face
as it seeks to implement its plan of building dozens of stores in Chicago? Is
this a blueprint for how Wal-Mart will capture urban center market share
across the country?
- Wal-Mart offers $8.75/hr for more stores – Chicago Tribune
Chicago Unions Can’t Agree If They Have an Agreement – Bloomberg
- Wal-Mart cuts labor deal to expand in city – Crain’s Chicago Business