“We are going to beg, borrow, steal and learn from them as quickly as we can, because it is important for our urban strategy.” That was Bill Simon, the new CEO and President of Walmart US talking about the company’s smaller format stores in Mexico and across South America, but he could just as easily have been talking about the communities it is about to enter.
Walmart has just announced that it will use smaller format stores (as opposed to the monstrosities it has favored in the past) to try and force its way into urban markets like New York, Boston, Washington, D.C., Chicago and others. The company has been struggling over the last several years to get a foothold in cities because U.S. sales are slumping and, quite frankly, it doesn’t have any other place to go. But cities aren’t like the suburbs, and you can’t go building 200,000-square-foot big box stores downtown.
So what does this mean for our cities? Nothing good. Beyond Walmart’s infamous treatment of workers, a new store, especially in an urban market, usually spells trouble for the local economy. For one thing, a recent study found that urban Walmart stores did not create new jobs in area. In other words, when a Walmart moved in to town, other stores closed. The result is that instead of improving a community by adding jobs, Walmart is instead replacing jobs that were already there. Often the jobs they replace paid more, offered better benefits and paid for some health care (which Walmart does not). To top it all off, Walmart often uses tax loopholes to cheat states and local governments out of the money they need to provide essential services.
