It's a tale of two stories. One told by labor leaders in Chicago has them finally getting Wal-Mart to sit down and agree to basic principles that will enable unions to support the retailing giant's efforts to build stores in the city. The other is Wal-Mart claiming it has not compromised one iota and has managed to get previously staunch opponents to step aside as it continues on its inexorable path to growth in urban centers across the land.
Whatever story is the truth seems to make little difference because aldermen in Chicago have voted to rezone land on the south side of the city to allow Wal-Mart to build its second store in the city. And, by previous accounts, it will be the second of perhaps dozens of stores the company will open in Chicago.
The Chicago Tribune earlier in the week, citing Hank Mullany, executive vice president and president of Wal-Mart's northern U.S. division, reported the chain was looking to build dozens of stores, from 25,000 square-feet up to 140,000 square-foot supercenters. The smaller stores --presumably Neighborhood Markets, although that format typically runs 42,000 square-feet --would be set up in neighborhoods that no longer have a grocery store.
Mr. Mullany said that Wal-Mart's plan for Chicago would "eradicate the food deserts" within the city and create up to 12,000 new jobs. The unemployment rate in Chicago was at 10.5 percent in May, compared with 9.7 percent for the country.
Leon Nicholas, a director at Kantar Retail, told Bloomberg News, "Chicago could very well be a model for how Wal-Mart expands into urban areas -- a multiformat, localized approach that leverages Wal-Mart's growing community-relations skills to capture urban market share. Chicago opens up the opportunity for small-store urban expansion that they've been talking about for a while."
The nature of the compromise made (or not made) by Wal-Mart to gain access to Chicago was that the retailer would pay workers at least $8.75 an hour, 50 cents more than minimum wage in Illinois, and agree to a minimum raise of 40 cents an hour for workers who stayed with the retailer for a year. The retailer also agreed (or not) to use union workers in building its stores in Chicago.
Discussion Questions: What challenges will Wal-Mart face as it seeks to implement its plan of building dozens of stores in Chicago? Is this a blueprint for how Wal-Mart will capture urban center market share across the country?