CHICAGO — Finally getting a foothold in a coveted big-city market, Wal-Mart on Wednesday opened a 142,000-square-foot store on the city’s West Side here.
The world’s largest retailer, seeking to expand into cities because of saturation in the rural areas where it has roots, traveled a challenging road in Chicago. The City Council in 2004 approved the West Side store but killed plans for a second Wal-Mart on the South Side. In July, the council passed legislation — opposed by Wal-Mart and Target, among others — mandating that major big-box retailers boost pay to at least $10 per hour along with $3 per hour in benefits by 2010. Mayor Richard Daley successfully vetoed the measure, although proponents have vowed to introduce a new version.
New York, Los Angeles and Boston are among the cities where Wal-Mart has been rebuffed amid criticism of its employee wages and benefits, among other issues. The Bentonville, Ark.-based company has responded with a campaign to publicize the value it provides consumers, along with generating jobs and tax revenue for localities.
“We have to do a better job of explaining [that] we have competitive wages and benefits. We give back to the community,” said Chad Donath, Wal-Mart’s market manager for Chicago. “There’s a lot of misunderstanding out there of who we are and what we do.”
Many residents living in the city’s Austin neighborhood, however, welcomed the store. An estimated 15,000 people applied for 400 jobs, and customers were lined up before it opened. The store was packed all day.
Some shoppers, who previously traveled to suburban Wal-Marts, said they were happy to have one close to home. Others came out to see Chicago Bulls point guard Ben Gordon, who modeled Wal-Mart’s Exsto line, a collection of urban-themed attire for young men.
“It’s a great day for the residents of the West Side,” said Alderman Emma Mitts, who campaigned to get Wal-Mart in her Austin neighborhood. Mitts argued that residents needed the jobs Wal-Mart could provide and that the retailer would re-energize the community.
Wal-Mart, which estimates the first Chicago store will contribute more than $2 million a year in city and county taxes, has tried to win over the neighborhood. It is leasing space to an Uncle Remus restaurant, a longtime local favorite that serves fried chicken. In addition, the store is the first in Wal-Mart’s program to work with area leaders and businesses to bring economic investment into a specific urban district.
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Store manager Ed Smith said the retailer held vendor fairs before the opening to discuss potential partnerships with neighborhood businesses. The collaboration with Uncle Remus came out of those meetings, he said. Wal-Mart also carries Azteca tortillas that are produced in the area.
Wal-Mart also plans to donate $117,500 to programs in Austin and across the city. The company hopes these initiatives will generate goodwill and pave the way for more Wal-Marts in the city.
Donath said Wal-Mart executives plan to meet with city officials in the next month to discuss building more stores.
“We’ll sit down and see what’s available,” said Donath, who said the retailer does not have a set number of units it will propose. “We would like to get as many [stores] as we can.”