Wal-Mart is opening the doors of its third Chicago location Wednesday – the city’s first “Neighborhood Market” store, selling mostly groceries – in the West Loop.
On Tuesday, the company put finishing touches on the 27,000 square-foot store housed inside Presidential Towers, on the ground level of the 2,400-unit high-rise apartment complex at 555 W. Madison St.
The sight of fruit, bread and fresh vegetables greet customers as soon as they step through the front door. It is a sign of what to expect from the store, where groceries make up about three quarters of the inventory, said Wal-Mart spokesman Steve Restivo. For comparison, groceries make up about a third of the inventory at large-format Wal-Mart stores, he said.
“Our approach to the city of Chicago is to be flexible,” Restivo said. “…We want the store size and the merchandise mix to be a reflection of the community it’s in.”
Wal-Mart’s Neighborhood Markets are a fraction of the size of its SuperCenter stores, which can be as large as 150,000 square feet, but bigger than Wal-Mart Express stores, which are usually around 10,000 square feet.
The retailer created the Neighborhood Market model in 1998. There are 155 nationwide, with plans to bump that total up to 300 by 2013, Restivo said.
Store manager Bill Skoufis said the site is convenient for Presidential Towers residents, who can “funnel through” the skyways connecting the complex’s four towers to reach the store. He said the location is a “perfect fit” for both the neighborhood and the greater city.
Outside Presidential Towers, resident Karishma Patel, 23, said she is excited about the store, both for its low prices and because of its proximity. The Rush Medical School student said she does most of her grocery shopping at Dominick’s, which is about two blocks west, but she said she will “for sure” be switching to Wal-Mart.
However, another resident, Peter Coleman, 26, is more skeptical of Wal-Mart expansion.
“It’s going to be tougher for the smaller mom and pop stores,” said Coleman, a Loyola University student pursuing a master’s in business and integrated marketing communication. “If they keep getting bigger, it makes it tougher for new entrepreneurs who want to start a grocery store.”
Chicago was a tough egg to crack for Wal-Mart because of sentiments like this. Wal-Mart operates about 180 SuperCenters, 28 Sam’s Clubs and five distribution centers statewide, employing more than 50,000 people as one of Illinois’ largest private employers. However, local labor unions spent years spearheading efforts to keep the Arkansas-based retailer out of the city. The city finally allowed the opening of a Wal-Mart Supercenter in the Austin neighborhood in 2006.
After the Chicago City Council last year negotiated an agreement with labor unions about Wal-Mart workers’ pay, the world’s largest retailer initiated a five-year plan to open several dozen Wal-Mart stores across the city. The plan promises to create about 12,000 jobs, generate more than $500 million in sales and property taxes and contribute $20 million through developing charitable partnerships.
A year after kick-starting that “Chicago Community Investment Partnership,” Wal-Mart opened a Wal-Mart Express in Chatham, with the West Loop Neighborhood Market as the latest opening. The company plans to open seven more stores by spring 2013 – two Supercenters, two Neighborhood Markets and three Express stores. Three stores are slated to open before the end of 2011: two Wal-Mart Express stores in Wrigleyville and River North, and a Neighborhood Market in Lakeview.
Local 881 UFCW union spokeswoman Elizabeth Drea said her union’s “viewpoint on the expansion of Wal-Mart in Chicago is the same now that it’s always been.”
“They are still the same company operating under the same business practices that we have been vocally opposed to for many years,” said Drea, whose union represents about 34,000 retail food and drug store employees in Illinois and Northwest Indiana.
Wal-Mart is familiar with criticism from labor unions and from small business owners who fear the big-box behemoth’s impact on mom and pop operations. Wal-Mart has faced an immense volley of lawsuits from its workforce through the years over issues ranging from allegations of poor health care coverage, unfair wages and working conditions to anti-union policies.
Restivo said the company still faces some of the common criticism heard over the years, but stressed “the more people get to know facts about the company,” the more they warm to Wal-Mart.
“There is some degree of misunderstanding about who we are. I think, quite frankly, there are still a number of urban myths about Wal-Mart,” he said.
When asked to mention some of those “urban myths” he said, “That’s a better question for our critics.”