For years, Wal-Mart’s policy of over-saturating a trade area with stores has caused the company to cannibalize its own stores.
This is no great surprise to stockholders. In its 2010 Annual Report, Wal-Mart officials tried to explain to investors why the company was deliberately competing with itself, thereby forcing down “same store” sales — those sales at comparable stores which have been open for at least one year.In its 2010 Report, Wal-Mart said: “As we continue to add new stores in the United States, we do so with an understanding that additional stores may take sales away from existing units.”
Latest case in point: the West Chatham neighborhood of Chicago, where a Wal-Mart superstore has killed off a Wal-Mart Express store at the tender age of one year.
In July of 2011, Wal-Mart opened a 15,000 s.f. Express grocery store in West Chatham. Six months later, on January 25, 2012, Wal-Mart opened up a 157,000 s.f. superstore about 1,000 feet away from its Express store. The Wal-Mart superstore at 83rd and Stewart Avenue needed only six months to put the Express store out of business.
When the Wal-Mart Superstore opened in Wesst Chatham, a Wal-Mart press release quoted Chicago Mayor Rahm Emanuel as saying, “This Wal-Mart is a win-win-win — a win for the local economy, a win for local job creation, and a win for the Chicagoans who now have access to a full selection of groceries and fresh food in Chatham. I am committed to driving economic growth and opportunity in our neighborhoods, and will continue to seek opportunities for Chicagoans to find good jobs and advance their communities.” The Mayor’s office issued no press release when Wal-Mart announced its Express store would close in a week.
At the time Wal-Mart opened its superstore, the retailer claimed that its project would bring 350 new jobs to the community. But right across the street from the superstore was the Wal-Mart Express store, which was one of the first prototypes of this smallest of Wal-Mart stores. The West Chatham Wal-Mart Express employed 24 Walmart workers. The retailer told The Chicago Tribune that all the Express workers have been offered jobs in the company, and most will simply be “walking across the parking lot” to work at the Supercenter.
Walmart admitted that its orignal plan was to have the Express store and the superstore co-exist — but those plans did not work out. The company told The Tribune that once the superstore opened, customers were leaving the Express store. “Customers appreciate having the one-stop shop environment at the SuperCenter,” a Wal-Mart spokesman said. “Over time we found that their unusually close proximity resulted in customers making a clear choice.”
Wal-Mart was quick to point out that the failure of the Express store in West Chatham would not have an impact on the expected rollout of Express stores elsewhere in the nation. “We expect to test, learn and refine these stores over time,” the company spokesman said. Two other Express formats in Chicago have been rated well by customers, Wal-Mart explained.
After roughly seven years of bittle battles in Chicago with the unions and community groups, Wal-Mart now operates six stores in the Windy City. About nine days ago, the retaialer announced plans to open a 41,000 s.f. Neighborhood Market in the south side neighborhood of Bronzeville. Chicago taxpayers will subsidize the project with $13 million in Tax Increment Financing dollars — a form of corporate welfare.
Readers are urged to email Mayor Rahm Emanuel on his “feedback form” at:
http://webapps.cityofchicago.org/eforms/org/cityofchicago/eforms/controller/contactUsForm/preFeedbackForm.do
with the following message:
Dear Mayor Emanuel,
What happened to the win-win-win with Wal-Mart in West Chatham? The city bent over backwards to let Wal-Mart build an Express store, and now, after only one year, that store is being shut down.
Both you, and Wal-Mart, knew that permitting a Wal-Mart superstore across the parking lot would surely shut down the Express store.
The reality is, West Chatham can’t be much of a food desert if a Wal-Mart superstore kills off one of its own grocery stores. You may not be Mayor when Wal-Mart decides to close its superstore — but one thing is clear: the taxpayers of Chicago will find out about it the same way theyd learned that the Express store was suddenly closing: from the newspapers.
Wal-Mart comes and goes as it pleases, when it pleases, and the people who live in the neighborhoods are not neighbors — they are just shoppers. Neither you nor your constituents have any ability to stop this wasteful experimentation with Wal-Mart market share.
Urban superstores are an oxymoron. From a land use perspective, they are land consumptive and wasteful. In this case, the big Wal-Mart has killed the little Wal-Mart, an example of how a rich and powerful corporation can become its own competition.
You and the citizens of Chicago have no power and no leverage over this inefficient game of retail musical chairs. Chicago will either lead growth or follow it. In this case, your administration is trailing after Wal-Mart, as they make one foolish decision after another.
For years, Wal-Mart’s policy of over-saturating a trade area with stores has caused the company to cannibalize its own stores.
