On May 26, the Chicago, Illinois City Council voted to give Wal-Mart a green light to open its first store inside Chicago city limits on the west side of the city. But it was not a breeze to get in. The retailer’s proposal kicked up a gust of controversy in the windy city. On May 5th, the Council had voted to postpone a vote on zoning changes that Wal-Mart needed to open its first two stores in the area. Opponents of Wal-Mart’s expansion plans said that the company harms competition, especially small business, and lowers labor standards by paying low wages, providing minimal benefits and blocking any efforts to unionize. City Alderwoman Emma Mitts, who supported Wal-Mart in her district, said that once Wal-Mart opens stores in Chicago, the community can work to make it a “better company.” Dow Jones reported that after three-hours of debate, the city council voted 32 to 15 to allow Wal-Mart to build a store in a predominately black neighborhood located on Chicago’s west side. “We are dealing with a huge company with a long history of predatory practices,” said council member Helen Shiller. The Council went on to vote on a second Wal-Mart development on the south side of town. That vote went down to defeat on a 25 to 21 vote in favor, which was not enough for the majority needed from the 50 council members. Wal-Mart called the west side vote a “great victory” for the company. The retailer called the delay on the south side of the city a “minor setback,” adding, “We got a pretty raw deal on the floor from city council members. I’m befuddled…we’ve been seriously maligned today.” Getting the approval to build in Chicago cost Wal-Mart a fair amount of money. To pave their way into Chicago, Wal-Mart hired a team of local legal experts and public-relations professionals to help fight the city’s labor unions and promote an image of the retailer as “a very good corporate citizen.” Wal-Mart also had to run a full-page ad in some area newspapers on the day of the vote saying that Chicago residents spend more than $500 million at Wal-Mart stores located outside of the city. The ad also said that the company would hire some 600 associates, with 70 percent of those being full-time positions, as well as generating 300 to 400 construction jobs while the store is built. Such claims, of course, are totally misleading, since Wal-Mart’s “new” jobs are often just “old” jobs at other retailers. Wal-Mart reportedly also hired telemarketers to connect supporters of urban stores to aldermen’s ward offices. Hired pollsters reportedly called hundreds of Chicagoans on the Monday and Tuesday before the city council vote.
It’s truly remarkable to watch a retail store have to lobby its way into a city. It is unprecedented in retailing history that any company has suffered so much resistance to their stores, and had to spend some much money to secure political support. As one Wal-Mart official said years ago, “Why all the fuss? We’re only a store, not a nuclear waste dump?” But as the Chicago vote shows, many communities consider Wal-Mart the retail equivalent of a nuclear waste dump, and will pull out the stops to keep Wal-Mart out of town. In a very visceral way, Wal-Mart is losing big time in places like Chicago. Because people in other communities all across the country are watching the extraordinary lengths to which the company must travel to get approval from city councils. Wal-Mart sees a “great victory” in their struggle to break into Chicago, when in fact they are losing credibility with each of these battles.