Walmart drive to move into US cities
By Jonathan Birchall , Financial Times
November 2nd, 2009
Walmart has stepped up efforts to mobilise local political support for new store openings in US cities and urban areas that were this month identified as a growth priority for the retailer by Mike Duke, its chief executive.
In addition to a renewed drive to open a second Supercenter store in Chicago, the retailer is also raising its political profile in Philadelphia and continuing to cultivate the ground for a potential move into New York City.
Walmart has long faced political resistance to its plans in the largest US cities, largely orchestrated by the UFCW grocery workers' union and its political allies. Walmart, the largest US private employer, is strongly anti-union.
Eduardo Castro Wright, chief executive of Walmart's US stores, has estimated that urban markets where the retailer is underrepresented could yield billions of dollars of new sales. "We already have in our real estate programme a robust plan to go after those," he told analysts in October.
The retailer has only one store inside Chicago's city limits and none in New York or Boston. While it has discount stores - which do not sell fresh food - around Philadelphia, Washington DC and Los Angeles, it has only a handful of its more profitable Supercenters near those cities.
The focus on urban markets comes at a time when Walmart's national reputation has improved, partly as a result of its strong performance during the recession.
Leslie Dach, head of corporate communications, said last month that Walmart's role in serving low-income customers during the recession had won the retailer "new respect from politicians, from economists and from the media".
The retailer's embrace of environmental sustainability over the past four years has also improved its ethical reputation, moving up Covalence's ethical rating of 27 global retailers from bottom in 2004 to second currently, behind Marks and Spencer.
Saint Consulting, a firm that specialises in local land-use politics, also reported in January this year a drop in the number of people saying that they would oppose the opening of a new Walmart store - at 56 per cent, down from 68 per cent two years ago.