Thursday, September 22, 2011

Report: NYC Could Become Walmart City

New York City could become Walmart City if a study released Wednesday by the Alliance for a Greater New York is right. And the numbers projected for Brooklyn are enough to give even a free-market evangelist pause.

Walmart's strategy calls for "controlling a significant portion of the retail market in New York City, the largest consumer market in the U.S., and then replicating this strategy in other urban areas," in order to juice its bottom line, AFGNY says.

Sinking its claws into New York City is pretty much a necessity for the retail behemoth. "Walmart has saturated rural and suburban markets to such a degree that it has begun to cannibalize its own stores," says AFGNY.

In order to achieve its average 21percent market share, Walmart would need to open 159 stores throughout all 5 boroughs, "creating devastating effects for local small businesses, communities and workers."

Brooklyn: Walmart's Ground Zero

One scenario projects 114 small format shops, 34 medium format (grocery store style), and 11 supercenters primarily located in the outer boroughs, with more in Brooklyn -- 48 -- than any other borough.

Walmart already has plans to build a store as-of-right in East New York, Brooklyn.

The report suggests that Walmart’s likely plans for expansion in NYC "would dramatically shift the city’s entire retail landscape for the worse."

159 Walmarts in New York City would mean:
  • A net loss of nearly 4,000 jobs
  • Over $350 million in lost wages
  • Over 4,000 Walmart associates in need of public assistance, costing $4 million in taxpayer dollars for health benefits alone
  • The shuttering of 105 retail businesses due to one Brooklyn Supercenter alone.
In Brooklyn, the projection is:
48 Walmarts:
     • 3 Supercenters
     • 10 Walmart Markets
     • 35 Walmart Express stores
• Net job loss of 1,160 retail workers
• Almost $72 million per year lost in total retail wages due to the Supercenters alone
• 1,247 Brooklyn Walmart workers eligible for state subsidized health care
• $1.2 million cost to taxpayers

One side effect not mentioned in the report would be the loss of tourist shopping dollars. Out-of-towners love shopping at the city's quirky, special-snowflake retailers. If NYC becomes Walmart City, the jazz, zing, pop and wow-factor of New York City retail would be greatly diminished. Tourists can shop at Walmart at home. Not having to shop at Walmart is one good reason to come to New York City.

See the full report here

(Before 2008, Walmart was spelled Wal-Mart.)
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