Urban markets in the U.S. are Walmart's last frontier, and proving to be the most difficult to breach. It's taken years for Walmart to gain a foothold in places like Chicago and New York, but it recently announced expansion plans in both locations, is negotiating with unions, and established a website expressly to promote itself to New Yorkers.Walmart is hardly alone in this urban quest. Target too, needs city stores to meet expansion goals but it's found friends in city councils where Walmart meets only opposition. So much so, that I once heard a Target executive marvel that the retailer often gets requests from municipalities to build stores in their communities, communities that have also opposed new Walmart locations.
Target's heralded expansion into urban markets continues: it just announced plans for a new store on Chicago's storied State Street, in a historic Louis Sullivan-designed building that formerly housed a Carson Pirie Scott department store. The city even allocated $24.4 million in Tax Increment Financing funds to help with renovation costs for the building, a designated National and Chicago Historic Landmark.
So while Target benefits from tax incentives, Walmart faces opposition. One is judged good for cities and one spells a death knell for small businesses while also being perceived as a bad employer. I've never quite understood this. Both keep unions from organizing workers. Neither has generous benefits packages or pays more than the market norm, and in some cases Target's pay and benefits have actually been worse. Both sell similar merchandise and compete against small and large retailers, trying to best them all on price.
Is it elitist? The perception that a more affluent group of people shop at Target, that the stores and shoppers are more attractive or stylish than the people of Walmart? Maybe it's just that Walmart is a bigger target than Target, or that its executives haven't properly worked with local politicians or community leaders. Target does have a widely-publicized philanthropic initiative that gives back to communities. No small thing to be sure, but enough to warrant rolling out the red carpet?