Wal-Mart's only way into NYC: 159 stores?
STEPHON JOHNSON Amsterdam News Staff | 9/29/2011, 4:26 p.m.
It's no secret that Wal-Mart wants in on New York City's massive retail business. But one recent study shows that if the retail giant wants to make enough money to cover its costs, it may make more sense to pepper the city with smaller stores rather than a few superstores that are costly to build and maintain and face real opposition from many neighborhoods.
The study, by Josh Kellermann of Alliance for a Greater New York (ALIGN) and Stephanie Luce of the City University of New York's Murphy Institute for Worker Education and Labor Studies, suggests that in order for Wal-Mart to achieve a 21 percent market share-their standard in many markets-they would have to open 159 stores in New York City. A move like that would destroy small businesses and eliminate the corresponding jobs and community infrastructure those small businesses bring.
According to the study, 159 Wal-Marts would result in a loss of almost 4,000 jobs and over $350 million in wages. One Supercenter in Brooklyn would close 150 local retail businesses alone. But that's only the beginning.
"Wal-Mart's entry into the five boroughs would increase the number of workers eligible for state subsidized health care," the study reads. "This will affect 748 workers who work in the Bronx, 1,247 in Brooklyn, 828 in Manhattan, 1,155 in Queens and 301 workers in Staten Island."
Kellermann and Luce also stated in the study that having only a few Wal-Mart stores in the New York City area wouldn't help the corporation's growth; it would take a bigger project to accomplish that.
"Wal-Mart is spending millions of dollars on advertising, lobbyists and donations to politicians and community groups in its campaign to bring its first store to New York City," they wrote. "But the world's richest retail corporation is not spending all that money just to build one or two stores here.
"Our study demonstrates that Wal-Mart may be planning over 100 stores in the five boroughs. Wal-Mart is desperate for growth, particularly since its stock has been stagnating and the company has saturated most nonurban markets," the study continued.
As the study also points out and as many financial analysts have stated, Wal-Mart is the largest retailer in the world, with almost 50 percent higher sales than its seven closest competitors combined. The company has the money and influence to push itself into any area on the country's map.
But New York is a tough monster to crack, since it still has a strong unionized workforce that is not interested in an anti-union corporation. Several studies, including the Kellerman and Luce report, have stated that Wal-Mart's presence would shutter local business, lower wages for all workers and destroy what makes New York unique.
"Wal-Mart's slogan is 'Save Money, Live Better.' This slogan fails to acknowledge that low-cost goods must be accompanied by higher wages in order for people to truly live better," the study's conclusion states. "A recent study shows that raising the wages of Wal-Mart workers would cause very little impact on low-income consumers. One study estimates that 22 percent of Wal-Mart workers earn wages between $7.25 and $9 per hour and 42 percent earn between $9 and $12 per hour.
"A full-time worker making $8.75 per hour will earn $17,500 per year," the study continued. "If Wal-Mart started all employees at $12 per hour and passed along that entire cost to consumers, the average Wal-Mart shopper would spend just an additional $12.49 per year, while low-income Wal-Mart workers would see a raise of $1,670 to $6,500 per year.
"This would help prevent thousands of working people from having to seek government assistance. Even for consumers with little extra income, $12.49 per year is a minimal cost for the benefit higher wages would bring to the community."
Wal-Mart spent roughly $2.1 million in lobbying efforts for a New York City store in the first half of 2011 alone.
Having conquered rural areas and the suburbs, the company is giving its all to push into the urban market.
"Wal-Mart needs NYC more than NYC needs Wal-Mart," the study stated. "159 Wal-Marts across the five boroughs would drive down wages for all retail workers in NYC, force many local businesses to shutter and undermine the unique character of NYC."
Wal-Mart officials had not responded to interview requests by press time.