Wal-Mart got a bad case of the Chicago blues this past week, as a big wind of opposition blew the retailer out of the Windy City, and all the way back to its Arkansas compound. Wherever it has gone in urban areas, Wal-Mart has slammed into opposition from organized labor — something the company never experienced in the small towns of Missouri, Arkansas and Oklahoma during its birth years. In Chicago, the issue was not over zoning, but over wages. The Chicago City Council passed a “living wage” ordinance, but on September 19, 2006, Mayor Richard Daley vetoed the legislation, which would have forced large corporations to pay a “living wage” to its workers. The City Council voted 31-to-18 to override his veto, coming just 3 votes shy of the necessary two-thirds needed to override. The ordinance would have set minimum pay and benefit levels for any major retailer with a store 90,000 s.f. or larger. Wal-Mart issued a press release immediately which said: “We will open our first store in the city on Chicago’s west side later this month. This store will show what a great asset Wal-Mart can be to the community, as an employer and corporate citizen, and as an affordable resource for thousands of Chicago’s working families.” It never worked out that way. Wal-Mart had hoped to open 20 stores in city. Thus far they have opened one 142,000 s.f. discount store on the west side of the city — but only after a very contentious political debate. Two years earlier, in August of 2004, Wal-Mart pulled out of its effort to build a store on the south side of Chicago. The company cited its concern over the living wage bill as the issue. “It’s not about a living-wage issue,” a Wal-Mart spokesman said at the time. “It’s about an ordinance that singles out just some — not all — businesses in Chicago. We wanted to defer the discussion until we got a better sense of how this big-box thing was going. We’re just not comfortable committing considerable capital investment to a site when we don’t know if we’re going to be able to operate in Chicago. The developer, rather than extending our contract, decided to go ahead with the [zoning] vote. It’s not our call. The project is going ahead without us.” But Wal-Mart did not give up on its south side dreams. Four years later, in March of 2008, city officials denied Wal-Mart’s request to build a 150,000 s.f. store in the huge Chatham Market project, which spreads out over 50 acres on the site of a former steel plant, with a total of 418,000 s.f. of retail space. Chicago’s Planning Commissioner notified Archon, an Irving, Texas-based developer that Wal-Mart would not be allowed to open at Chatham Market as proposed. Given this history, Wal-Mart didn’t need a weatherman to see which way the wind was blowing in Chicago. This past week, the Chicago Tribune carried a story entitled “A Closeout For Wal-Mart,” which suggested that Wal-Mart’s efforts to locate a south side store were over, and that the corporation was “turning its attention to a backup plan of opening stores just outside city limits.” The Tribune reported that Mayor Richard Daley had advised Wal-Mart that he doesn’t want controversial headlines about Wal-Mart battles in his city while his Administration pursues an effort to host the 2016 Olympics in Chicago. That decision won’t be made by the Olympic Committee until the fall of 2009. If true, that puts more than a one year hold on any Wal-Mart projects — and that’s one race Wal-Mart won’t bother to enter. Meanwhile, the south side developer Archon, which is owned by the Goldman Sachs Group, has put Wal-Mart’s piece of the Chatham Market property up for sale, hunting for a new, and less-controversial anchor.
When it can’t penetrate the inner urban circle, Wal-Mart will continue to propose stores just outside the urban area. But the company recently lost a race in Tinley Park, only 21 miles from downtown Chicago, and lost another event in St. Charles, Illinois, one hour west of the city. In addition to the Wal-Mart discount store on W. North Avenue in Chicago, the company has another 11 stores within 20 miles of Chicago, in Forest Park, Bedford Park, Niles (2), Evergreen Park, Hodgkins, Northlake, Bridgeview, Villa Park, Crestwood, and Mount Prospect. But none of these stores are supercenters, the company’s more profitable model. The Tribune says Wal-Mart has targeted the communities of Calumet Park, Cicero and McCook. Its failed project in Tinley Park was a superstore. Lee Scott, Wal-Mart’s CEO, announced in April, 2006 in Chicago, that Wal-Mart “has never been afraid to invest in communities that are overlooked by other retailers.” But the company’s efforts in cities like Los Angeles, Boston and New York have gone nowhere. Wal-Mart Watch reacted to Wal-Mart’s Chicago collapse by saying, “If Wal-Mart wants to stimulate the economy and move into major urban markets, it should raise the wages of its workers to increase their spending power and quality of life. The company may currently be benefiting from a weak economy, but it is short-sighted for Wal-Mart not to improve wages and benefits for its employees and will continue to impede its ability to expand into new markets, as our research and Chicago’s actions have shown. A recent study also shows that Wal-Mart – which made more than $12 billion in net profit last year – is well positioned to raise wages and help its employees live better. With its low prices at-all-costs focus, Wal-Mart may appear to help the U.S. economy. But the reality is that with its poor wages and benefits, Wal-Mart makes its workers and the communities where it operates poorer.” The door in Chicago could blow open again for Wal-Mart in the future, so activists plan to remain on the ready. “We are a store that wants to come in and invest in that community,” a Wal-Mart public affairs spokesperson told The Tribune. But it will be difficult for Wal-Mart to win that race, given the stiff winds of opposition that have blown its projects off course.