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Wednesday, August 15,2007

Follow the Leader: Retail Check-Up

So far, the White Plains Wal-Mart appears to have helped, not hu

By John DeSio
. . . . . . .
No single company has been privy to more scorn from Democratic politicians, labor unions and everything in between than Wal-Mart, the nation’s largest retailer and beacon of consumer choice across most of the United States.

In New York City, elected officials and their allies in labor have done all they can to keep the company out of the five boroughs, short of imposing an outright ban. Wal-Mart does not allow its employees to unionize and has a reputation for treating those workers it has badly, and that’s enough for elected officials to perform feats of legislative strength to keep ’em out of NYC.

But another argument against the company, one that the average city dweller can more likely identify with, is the need to protect mom-and-pop retail operations from a low-price juggernaut they could never compete with. Whether it’s appropriate for government to legislate the rise and fall of open-market business is besides the point, since nobody wants to see their local grocery, shoe store or electronics boutique shuttered because Wal-Mart came to town.

One year ago such concerns were raised about a new Wal-Mart location slated to open in the Westchester town of White Plains. But company officials say the response to that location has been nothing but positive. “The store’s been great,” said Steven A. Restivo, regional spokesman for Wal-Mart. “Our White Plains store has done a great job of not only serving local customers but also making a positive contribution to the city.” Restivo added, “Our experience in White Plains has been terrific.”

The two-story store sits in the heart of the downtown White Plains business district and serves as a model of what a Wal-Mart location would look like should one eventually open within NYC limits. The 179,131-square-foot store created 400 new jobs for the area, for which over 4,200 people applied.

It’s easy, and perhaps necessary, to write-off the company line about the store’s success. No Wal-Mart spokesman would have ever told a reporter that their company was doing bad things. But White Plains business leaders, charged with protecting those mom-and-pops previously mentioned, also find reason to cheer the location’s success. They note that sales tax revenues in White Plains are at an all-time high, a refutation of the claim that the retailer would have hurt local businesses.

One thing that Wal-Mart critics do not typically account for is the foot traffic a Wal-Mart brings to an area. Shoppers do not just come to the Wal-Mart and leave, said Rich Ammirato, executive director of the White Plains Business Improvement District. They stay and spend their money elsewhere in the neighborhood, a rising tide that raises all retail ships. “It has had a positive effect overall on our downtown business district,” said Ammirato.

Some stores have shut down, either directly or indirectly due to Wal-Mart’s presence in White Plains, though the discerning shopper is not likely to miss them. About 10 years ago, rents in the area would have run between $20-$30 per square-foot, said Ammirato. Today, that number is between $40-$50 for the same space. Those rising costs have forced lower-end retailers, like 99-cent stores, to flee the neighborhood. But plenty of new retailers are lining up to take their place. “That foot traffic, and those rent increases, have really changed the shopping district,” said Ammirato. “It’s a different quality of tenant we’re seeing on the avenue today.”

“We’ve certainly been happy with our experience in White Plains,” said Restivo. “We’ve heard nothing but positive things from the community and the other businesses.” That certainly does not mean that a Wal-Mart in Queens or the Bronx would see similar successes. The White Plains Wal-Mart is located on the street in a bustling shopping district. Had it been placed in a stand-alone strip mall that desired foot-traffic, shoppers would have only been drawn to that strip mall and away from Main Street, which could have had a dire effect on White Plains business—and not just the 99-cent stores.

It might be worth acquiescing to Wal-Mart’s desire to build in the five boroughs if only to keep tax revenue at home. Though figures were not available for the White Plains location, the company has reported in the past that roughly $90 million is spent annually by NYC residents at its Valley Stream, Long Island, store. And that’s a low-ball estimate, since the company can only count credit cards and checks and not cash. But unless the company decides to give unions a shot, or politicians totally detach themselves from those same unions, you likely won’t see a Wal-Mart in New York City anytime in the near future.
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