Wal-Mart has just one store each in Los Angeles, Chicago and Philadelphia, according to Deutsche Bank AG. It has none in New York City. "It's an untapped market for them," said Bill Dreher, an analyst at Deutsche Bank Securities Inc., a New York brokerage house. "They need a place to grow."
In some large cities, Wal-Mart's efforts to build stores inside city limits have encountered fierce opposition from unions, community groups and small businesses. The Los Angeles City Council has given preliminary approval to and plans to vote today on an ordinance that would make it difficult for Wal-Mart and its competitors to open supercenters within Los Angeles city limits. In response to the attacks, Wal-Mart has spent millions of dollars to lobby city councils and residents of places such as Los Angeles and Chicago.
Metro Business: Coverage of Washington area businesses and the local economy.
Until four years ago, the 23-acre Brentwood site was a derelict lot for impounded cars surrounded largely by townhouses and apartment buildings inhabited by middle-class and poor residents. City officials cited its development into a bustling retail center as one of their top achievements in the pursuit of retail in the District. Its Home Depot draws shoppers from all parts of the District and from nearby Prince George's County, according to city officials.
Wal-Mart already has 27 stores in the Washington region, all of them outside the Capital Beltway. Those stores collected about $442 million in revenue in 2004, up 17 percent from 2003, according to Food World, a Baltimore trade publication. Target Corp., another big-box store and major Wal-Mart competitor, also plans a store in the District, on a new development in Columbia Heights. Under Giant's lease for the Brentwood land, no other tenant on the space can devote large percentages of their stores to groceries, meaning that a Wal-Mart would have to focus on general merchandise instead of food.
To supporters of a Wal-Mart in the District, the store would add discount shopping and help keep millions of D.C. residents' dollars from flowing to the suburbs. "We need this kind of store in the city so that District residents do not have to do their shopping in Virginia or Maryland," said Gregory H. Leisch, chief executive of Delta Associates, an Alexandria-based real estate research firms. "It's a win for the District."
"It would be a great addition to the Brentwood retail complex," said D.C. Council member Vincent B. Orange Sr. (D-Ward 5), who represents the surrounding area. "It will be a place where, once again, consumers in Ward 5 will be able to shop at discounted prices."
Others argue that whatever benefits Wal-Mart offers in the way of low prices are canceled out by other corporate practices.
"The community does not want a Wal-Mart," said Dominic Moulden, executive director of Manna Community Development Corp., who called the company's business model "immoral." The outfit was part of the development team on the site but backed out earlier this summer when it learned discussions were underway with Wal-Mart.
Manna, a nonprofit group that works to develop long-depressed D.C. neighborhoods, is worried that a Wal-Mart would drag down wages in the neighborhood and drive smaller, locally owned stores out of business. "We think it's wiser to hold out for a better company," Moulden said.
For unions, the arrival of Wal-Mart in the District could have a symbolic as well as practical impact. The District-based United Food and Commercial Workers union, which represents grocery workers, has blamed Wal-Mart for the loss of thousands of member jobs.
"This is not an employer you want anywhere, particularly in the nation's capital," said C. James Lowthers, president of the union's Washington area chapter.
Staff writer Margaret Webb Pressler contributed to this report.