If Wal-Mart Can Make it There

Crain’s New York, a weekly business journal, turned its attention recently to Arkansas, dedicating most of its front page to a story headlined “Here comes Walmart” and accompanied by an adorable illustration of a vest-wearing Wal-Mart associate with a winking yellow smiley-face head climbing the Empire State Building, King Kong-style.

The Big Apple has long resisted the Bentonville Behemoth. Five years ago, Crain’s published an insightful report noting that city officials had rejected Wal-Mart, ostensibly because of its employment policies, while welcoming Target, whose employment policies were not appreciably different from Wal-Mart’s.

The objections of retail unions carried a lot more weight during good economic times. But now struggling construction unions are eager to build Wal-Mart stores, even if they will eventually be staffed by non-union workers. Further resistance is futile, especially when Wal-Mart has proven itself willing to tweak its own business plan in order to find new customers.

A few weeks back, that other New York business publication, The Wall Street Journal reported on some of those tweaks, which include smaller store formats and a return to the company’s founding principles.

“At the start of the recession,” reporter Miguel Bustillo wrote, Wal-Mart “focused on attracting more middle-class customers who were ‘trading down’ to discount stores by remodeling to feature neater aisles, fashionable clothing, and eye-grabbing discounts on fewer items.

“But Wal-Mart now admits the gambit alienated many of the blue-collar customers who had made it a retail behemoth in the first place. So after shuffling executives, the company is hurriedly restoring the ungainly pallets of merchandise to its center-store aisles and reworking its marketing strategy to emphasize the ‘every day low prices’ formula that the company’s late founder Sam Walton made famous.”

Far more astonishing was this revelation: Wal-Mart’s domestic growth “has also stalled as it has begun running out of rural and suburban markets for its warehouse-sized supercenter stores, leaving large cities such as New York, Chicago and Los Angeles as the company’s last frontiers for domestic expansion.”

According to Crain’s, Wal-Mart has its winking eye on 180,000 SF in a shopping center in Brooklyn. The shopping center was approved by the City Council last year, but the Retail, Wholesale & Department Store Union is objecting to the “environmental impact” if one of the retailers turns out to be Wal-Mart.

Yes, the arrival of Wal-Mart in New York will have an impact on the environment there – especially the environment for labor unions.

The company that has literally run out of small markets to conquer is going to make it in New York, New York.