Lower prices for all trump higher wages and profits for the few
Slowly but surely the headwinds Walmart has faced for years in its domestic expansion efforts have begun to diminish to the point where major victories are now being scored. Two examples stood out this week on opposite sides of the country. The highest profile of these is the situation in New York where it may not seem like Walmart won a victory this week, but it did. Walmart’s entry into the city has been the subject of considerable and heated debate for at least five years, but the situation has come to head in recent months. From the launch of an information website a few weeks back to an announcement of a five-year deal with the Building and Construction Trades Council of Greater New York, things are increasingly going Walmart’s way in the Big Apple.
It may not have seemed like it yesterday afternoon when a City Council committee held a meeting to discuss Walmart. Walmart skipped the meeting because it didn’t like that the agenda was focused solely on the impact of its business, which gave opponents plenty of opportunity to trot out familiar arguments about the destruction of small business, low paying jobs, etc.
Instead, Walmart took its message directly to the people with a guest editorial in the New York Daily News by Walmart U.S. president and CEO Bill Simon. Simon talked about how Walmart has become a better company with improved benefits and opportunity for all, how it will be an engine for job growth while saving people money and how Walmart will bring low prices on quality food to neighborhoods.
“At the end of the day, it’s not a question of whether New Yorkers want to shop and work at Walmart; they already do,” said Simon. “The real question is whether one of the greatest cities in the world needs to put up walls against a job-creating, taxpaying, law-abiding retailer from Arkansas. That’s not the New York City I know. New Yorkers are famously tough and resilient. No one needs to “protect” them from Walmart. Let New Yorkers choose where they work and shop.”
Whether it is next week, next year or five years from now, there will be Walmart stores in New York and perhaps a lot of them. Eventually, the allure of low prices for the masses wins out over the interests of those who benefit from maintaining the status quo, and the situation unfolding in New York is reminiscent of Walmart’s equally lengthy battle in Chicago. The situation there changed after Walmart agreed to use union labor on store construction projects. It did the same thing in New York, even though it has yet to secure a site or approval for a store.
While high profile events were unfolding in New York, a largely unnoticed development on the West Coast took place in San Diego. The City Council there repealed one of those convoluted, narrowly crafted measures it had just adopted in December that was designed to prevent Walmart from opening stores. Walmart had collected enough signatures to put the issue on a ballot to be decided by voters, but the cash strapped city decided it was easier to repeal the ordinance than hold a costly election.
Whether it is San Diego, New York or Chicago, look for this situation to play out in other urban areas in the years ahead. Walmart’s low-price value proposition coupled with other compelling messages around sustainability and offering healthy food make for an effective combination to overcome pockets of resistance.