New Study: Walmart Could Open an Estimated 159 Stores in NYC

159 Walmart Stores in NYC Could Lead to an Estimated 3,980 Jobs Lost, $353 Million in Lost Wages, and a $4 Million Bill for Taxpayers

Walmart Looking at NYC to Offset Declining U.S. Stock Prices and Stagnating U.S. Growth

New York, NY –“The Walmartization of New York City,” a new study released today by ALIGN, a New York-based nonprofit organization, reveals that Walmart’s growth plans for New York City could lead the company to open an estimated 159 stores here, most of them smaller format stores designed for urban areas, a finding consistent with Walmart’s oft-repeated declaration that it is evaluating opportunities for new stores across the five boroughs.

It is the first study of its kind analyzing retail market share data, industry analyst reports, and Walmart’s own financial reports in order to show the large-scale roll out the company is likely planning in New York City and to explain the likely economic impact.

It looks closely at Walmart’s market share in the grocery industry across the U.S. and rigorously calculates the minimum number of stores Walmart would likely need to build in New York City in order to reach a corresponding level of market share here.

The study estimates that the economic impact of this Walmartization on NYC could be devastating:

  • A net loss of 3,980 jobs throughout New York City
  • The loss of $353 million in wages for retail workers whose jobs remain
  • Taxpayers footing a $4 million bill for health care benefits for 4,279 new Walmart workers

“Walmart is desperate for growth in New York City, because the company has saturated most non-urban U.S. markets and its U.S. stock has been stagnating,” said Josh Kellerman, an ALIGN researcher who co-authored the study with Stephanie Luce, an economics professor from CUNY. “But a few NYC stores will do little to address its weak economic outlook. So the company is looking to open many stores throughout NYC and control a significant portion of the largest consumer market in the U.S.,” he said.

As part of its campaign to enter New York City, Walmart spent over $2.1 million in lobbying expenses in the first half of 2011, six times as much as it spent in the last four years combined, the study shows. Meanwhile, over the last twelve months, Walmart’s stock has significantly underperformed competitors such as Costco and Kroger, primarily because its same store U.S. sales (a key economic indicator in the retail industry) have declined for nine consecutive quarters.

“This study makes it clear that what’s good for Walmart is not good for New York City,” said New York City Public Advocate Bill de Blasio. “Millions of dollars worth of advertising can’t sweep Walmart’s record of killing jobs and small businesses under the rug. We have to protect our city’s middle class from companies that actively undermine it.”

According to the study, Walmart has saturated non-urban U.S. markets to such a degree that it is beginning to cannibalize sales at its own stores. So it is now focusing on growth in urban markets it had once ignored. Walmart’s CFO, Michael Fung, recently pointed out that “Wal-Mart has twice the opportunity to grow in Los Angeles or New York than the opportunity in India and China combined.”

Eduardo Castro Wright, Walmart’s Vice Chairman, stated in 2009 that Walmart stood to increase its sales between $80 and $100 billion by reaching its national average market share in urban markets.  New York City, as the largest consumer market in the U.S., likely represents the largest portion of this growth strategy.

Walmart’s share of the US grocery market is 21%.  Reaching that same level of market share in New York City’s dense retail environment would likely require 159 Walmart stores of varying sizes. The study estimates it would be 114 of the new Walmart Express stores averaging 15,000 square feet, 34 Walmart Markets averaging 35,000 square feet, and 11 Supercenters averaging 100,000 square feet. (See the study’s detailed methodology section for more information on how the calculations and estimates were developed.)

“Walmart has made lots of promises about creating jobs and investing in communities, but the company’s rhetoric doesn’t match reality,” said Reverend David Dyson of the Lafayette Avenue Presbyterian Church. Given its power and influence, Walmart has an obligation to answer questions about its long-term impact on New York City. Walmart is hiding behind talking points, but New Yorkers see through the spin and want answers.”

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ALIGN: The Alliance for a Greater New York’s mission is to create good jobs, vibrant communities, and an accountable democracy for all New Yorkers. Our work unites worker, community, and other allies to build a more just and sustainable New York. For more information, please visit www.alignny.org


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