Photo via Walmart Corporate
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Walmart is one of the biggest retailers in the United States—with more than 11,500 stores and 1.5 million associates—operating grocery stores, supermarkets, hypermarkets, discount stores, and neighborhood markets. Although it is one of the largest and “low[est]-cost” retailers, it is absent from New York City and its five boroughs. Despite Walmart’s many attempts to enter the city, New Yorkers have strongly resisted all attempts.
Business Model
Walmart opened initially as a discount store for suburban and rural consumers. Walmart’s business model is unique in achieving its low prices. It has the largest network of suppliers in the world, giving them a high purchasing power to purchase large volumes at the lowest possible price. Regarding logistics, Walmart uses a price-saving tactic called cross-docking, where items are sent from manufacturing distribution centers directly to their stores, removing the need for intermediate storage. Due to this strategy, Walmart needs a sizable physical store with a large layout and many loading docs for products coming in. Finding an adequate location and space for a Walmart location in New York City has proven to be extremely difficult and costly, as the city is not zoned correctly for big retail stores. However, this hasn’t stopped Walmart from attempting to open a location in New York City.
Politics
Walmart’s most recent attempt to open a location in NYC was in 2013, but its efforts are always met with mass opposition due to its stores’ effect on the local economy. While opening a Walmart store in a new location does have significant positive effects on local consumers, it comes to the detriment of small businesses. Walmart offers its consumers low-cost products, leading them to spend less on essentials while giving them more spending power to stimulate the economy. However, local businesses directly competing with Walmart are often the most adversely affected. Small businesses cannot withstand Walmart’s low costs and diverse selections. In a study of retail trends in a group of Iowa communities, Stone (1997) found that sales of stores in competition with Walmart declined 10 percent after three years and 17 percent after ten years. This directly conflicts with NYC’s urban character and economy, in which small businesses account for over 99% of all firms and over 50% of employment.
Local businesses are not the only ones in opposition to Walmart. New Yorkers opposed the opening of a Walmart because of the public perception of the company’s employee treatment. Walmart has been at the center of controversies involving union busting, low wages, overtime pay abuses, and illegal retaliation. New York City tends to prefer other major retailers with better reputations. Target is popular in NYC, as the corporation has cultivated a better public image through advertising, higher wages, and philanthropic giving, making them appear to be a “more ethical” company.
As a result, Walmart’s many efforts to move into New York City were rejected and blocked by powerful groups and unions. But Walmart has not given up on its efforts. In 2018, Walmart opened Jet.com, an affiliate warehouse company in the Bronx. However, Walmart has since closed its warehouse and affiliate company due to financial and operational struggles—yet another sign that the corporation will not find success among New Yorkers.
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This article was edited by Brianna Budhram.
