Washington, D.C. Wal-Mart Makes Its Move On Nationís Capital
After several aborted attempts to build a superstore in Washington, D.C., Wal-Mart has changed its tactics and is zeroing in on much smaller projects, with a decided emphasis on grocery stores.
On August 28, 2004, Sprawl-Busters reported that Wal-Mart had abandoned plans to build a superstore in the Brentwood neighborhood of Washington, D.C. The Brentwood store would have been Wal-Mart's first venture inside the Beltway around the nation's capital. When Wal-Mart decided to bail out of the project, city officials were "stunned." Company big wigs actually visited the site, and returned to Bentonville, Arkansas, where they made the fatal decision on the project. The project was slated to be around 100,000 s.f. in size. "It floors me," one spokesperson for the developer told the Washington Post. "We had almost everyone on board."
In 2009, Wal-Mart scoped out another site near Poplar Point in the District's Ward 8, but the company said the site was too small and had other development problems.
On July 18, 2010, Sprawl-Busters reported that word had leaked to the media that Wal-Mart wanted to build on an 11 site in the northeast section of D.C. near the National Arboretum.
None of these projects ever got off the drawing board -- but now the giant retailer has changed its game plan, and is approaching city officials with a variety of different sites, and a focus on food. According to the Washington Post, "To make its stores fit on each of the varying properties, the company has agreed to consider an array of layouts, designs and parking arrangements, a reflection of the chain's new willingness to adapt its model to enter urban markets."
A Wal-Mart official said even more stores are coming: "We'll continue to evaluate additional opportunities across the District and will be flexible in our approach so that the final size, look and format of our stores is a reflection of the neighborhood where it's located."
Wal-Mart's main argument is based on voodoo retail economics. The company last week told the media that it would "create 1,200 jobs" by opening up 4 new sites in Wards 4, 5, 6 and 7. The store sizes will vary -- but are much smaller than the projects Wal-Mart failed to complete in the District. This job 'creation' is a gross figure, not a net number. Jobs destroyed at existing businesses are never part of Wal-Mart's economic analysis.
In a press release, Wal-Mart promised that it would "provide a competitive wage equal to or better than those offered by competitors, including unionized grocers." Yet the retailer has aggressively fought "living wage" legislation in Baltimore and Chicago that would have required the company to pay much lower wages than they claim they are paying. Wal-Mart has told the media that it will pay an average hourly wage of $12.49 -- higher than the living wage threshold.
To soften the ground politically, Wal-Mart has created a website to mobilize public support, and commissioned a poll to convince elected officials that cheap products and low wage jobs are really attractive to the public.
According to Wal-Mart's poll, 73% of D.C. residents say they are "in favor" of Wal-Mart coming to D.C. and locating one or more stores. "D.C. residents are going to great lengths to shop and work at Wal-Mart," added a Wal-Mart spokesman. "What's more, by almost a 2 to 1 margin (61% to 33%), D.C. residents favor Wal-Mart coming to the District due in part to the fact that they will create jobs." The poll was conducted from November 7 to November 9 and surveyed 800 Washington D.C. residents.
The pollsters did not suggest that Wal-Mart might also cause existing jobs to be lost -- which would have elicited a very different response.
As the company has done in Chicago, it bases the need for its stores on the fact that many D.C. residents are driving to the suburbs to shop at Wal-Mart -- a reversal of the typical suburbanites coming to the city to shop. According to Wal-Mart, Washingtonians spend more than $41 million at its stores outside the District.
Wal-Mart's multiple store assault on the nation's capitol is based on a new store paradigm. "Really what happened is Wal-Mart had a change in its focus," said one developer, including devoting 40 to 50% of its floor space to groceries. Wal-Mart said it was looking for "food desert" sites where unemployment was high. Wal-Mart also promised that it would not ask for "public subsidies" at any of its 4 sites -- unlike its latest proposal in Baltimore, which was granted millions in tax breaks.
Officials at the D.C. Housing Authority, which owns one of the sites Wal-Mart wants, hopes to get the retailer to agree to "certain hiring provisions" modeled on the 'agreement' that unions and Wal-Mart negotiated in Chicago. However, Wal-Mart denied making any agreement in Chicago with organized labor, and said its wage agreement was only what it was going to provide anyway. But in Washington, D.C. the Housing Authority will be looking for some kind of hiring agreement. "We're all watching the Chicago model in terms of how that turned out, and we are going to work with all of our stakeholders to make sure we get the best deal possible in terms of the city," the head of the Housing Authority told the Post.
What you can do: There is no other retail store that has to hire a pollster to justify its interests in locating in a city. The 'poll' was designed to give politicians the high ground, to allow them to say 'I support this project because my constituents want it.' But any poll can be slanted to create the outcome one wants. It's all in how you present the questions.
But not everyone believes such polls. Wal-Mart's 'you need us now more than ever' approach has been challenged by the United Food and Commercial Workers Union (UFCW). "Because of the slow economic recovery, communities are at risk of accepting any jobs offered rather than insisting on jobs that meet their standards," a spokesman for the UFCW International told Bloomberg News. "We must use our power to stop a race to the bottom."
Readers are urged to email D.C. City Council Chairman Vincent C. Gray, Council at:
firstname.lastname@example.org with the following message:
"Dear Chairman Gray, You will never see 1,200 jobs created at Wal-Marts in D.C. That number is a gross figure -- with no offsetting losses at existing businesses. Wal-Mart is focusing on grocery stores, which means a number of existing grocery stores will fail. According to a study published in 2003 by Retail Forward, two existing grocery stores will close for every one Wal-Mart that opens.
And if Wal-Mart is really going to pay their people $12.49 an hour -- then get them to agree in writing to that wage, with annual increases. The retailer is fighting living wages in Baltimore, yet telling you they pay above living wage.
Smaller stores are better than superstores -- but keep in mind these stores are not neighborhood scale. Any store the size of two acres is not a metro-size store.
The 'poll' that Wal-Mart conducted was a push-pull survey that told people Wal-Mart would create new jobs -- so you can discount the results from such a self-serving study. If you want to know how your constituents feel -- have an independent poll done by a pollster paid for by Wal-Mart -- but hired by the city. You're likely to get very different results if you tell people that Wal-Mart is likely to kill off many existing jobs. These 4 Wal-Mart projects will not expand your retail pie -- they will only slice the pie into thinner pieces."
Readers should also email a copy of their letter to Chairman Gray to Wal-Mart's Washington, D.C. website: http://walmartwashingtondc.com/contact-us/