Urban Areas Say 'No' To Wal-Mart

Wal-Mart's expansion into urban areas, which the company believes is necessary for continued growth, is continuing to meet strong opposition.
October 3, 2006, 6am PDT | Matt Baumann
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While Wal-Mart continues to dominate rural America, "the retailer is acting to correct the imbalance: In the 12 months since July 2005, two-thirds of the stores opened by Wal-Mart have been in urban or semi-urban areas, ACNielsen says."

Last year, Wal-Mart attempted to open its first store in Boston, but eventually bailed out due to strong opposition. "Wal-Mart does not suit the clientele we have in the city of Boston," says Mayor Thomas Menino, explaining his opposition. "They don't pay wages that are sufficient. Their benefit structure is poor. I don't need employers like that in our city."

Wal-Mart has had success, however, in penetrating other parts of America's urban areas. For example, Wal-Mart in 2004, opened its first store in Chicago's West Side. "The city's alderman responded by passing a law mandating that big retailers pay employees an hourly wage of at least $10 and health-care benefits equivalent to at least $3 an hour." However, Mayor Richard Daly vetoed the law.

Besides Boston, Wal-Mart has fallen on particularly hard times statewide. Massachusetts, characterized as being "urbanized, educated, and liberal", operates only 47 stores. Meanwhile, Oklahoma, a state with less than half the population of Massachusetts, has 106 stores. Nonetheless, even with an average plan review process exceeding, in some cases, more than two years, Wal-Mart continues with its urban push.

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Published on Monday, September 25, 2006 in The Wall Street Journal
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