Wal-Mart Revisits Urban Expansion
new formats, its success in food and a buffed-up image, Wal-Mart appears
to be making a renewed effort to open stores in major urban markets.
Although labor unions remain a huge obstacle, the hunt for savings
in the recession may quell some local opposition.
article last week in the Washington
Business Journal indicated
Wal-Mart is looking for enough land to accommodate an 80,000- to 100,000-square-foot
store in Southeast D.C. for its first in the district. A separate article
New York in
early August found that the retailer was searching for its first store
in New York City’s five boroughs.
Wal-Mart was said to be looking to open a half-dozen or more stores
in coming years in Chicago after getting rebuffed by city leaders,
according to an article earlier this year in The
Wall Street Journal.
The Chicago stores, according to the article, are expected to serve
as an urban model that it could help open up access to other tough-to-crack
markets, including New York and Los Angeles.
moves are apparently part of a longstanding, albeit highly frustrating,
strategy to open stores in low-income, urban areas.
Wal-Mart’s first store in the West Side of Chicago was being built
in 2006, then CEO Lee Scott announced plans to open 50 stores in areas
heavily populated by minorities and in need of jobs and tax revenue.
That led to some stores on the outskirts of cities but also many frustrated
attempts to land inner city locations. After getting continually rebuffed
in New York City, Mr. Scott said in 2007, “I don’t care if we are
ever here." It still operates only one store in Chicago.
New York implied
that Wal-Mart may benefit from its efforts in recent years to improve
its image around the environment and employee health care.
discount formula and broader food offerings is also said to make it
more appealing in today’s climate. Wal-Mart has also been opening multi-story
stores to fit into more congested areas as well as smaller supercenters
to bring food savings to tighter markets. Conventional discount stores
in Bloomington, IN, and White Plains, NY, are adding fresh food to
working toward a format that’s more efficient and a smaller prototype,” Wal-Mart
spokesperson Amy Wyatt-Moore, told the Minneapolis/St.
Paul Business Journal. “It’s
about utilizing and reusing our existing footprint to be able to deliver
a Supercenter experience for customers in urban markets without adding
any square footage."
Wal-Mart will face fierce opposition from organized labor.
Wal-Mart claims to have improved corporate practices, these efforts
appear to be little more than window dressing," said New York City
Council Speaker Christine Quinn in a statement released to Crain’s.
"Until they make actual changes, providing a living wage and ending
the practice of preying on small businesses, I will block any attempt
to locate in the five boroughs."
Questions: What’s the likelihood that
the recession and Wal-Mart’s success in food will help it enter significantly
more major urban markets in the U.S.? Has urban opposition has lessened?
What do you think of the potential of smaller supercenters for urban
- Wal-Mart on
the prowl for a D.C. site – Washington Business
- Look who’s
eyeing NYC: Wal-Mart – Crain’s New York
- Wal-Mart Figures
Time Is Ripe for Chicago Push – The Wall Street
Wal-Mart to be small Supercenter – Minneapolis/St.
Paul Business Journal