Wal-Mart plans to open 4 stores in the District

By Jonathan O'Connell and Mike DeBonis
Washington Post Staff Writers
Thursday, November 18, 2010; 12:49 AM

Wal-Mart announced plans Wednesday to enter the District for the first time, laying out an aggressive strategy to open four stores and hire 1,200 people in the city by 2012.

The blueprint is part of a national effort by the chain to expand beyond rural and suburban areas, where its low prices and massive stores transformed the retail landscape, into urban markets. Although Wal-Mart already operates stores in Northern Virginia and suburban Maryland, it has never had a store in the District.

The four stores would be built in D.C. neighborhoods where retail options are relatively scarce: on the site of a former car dealership on Georgia Avenue NW; at New York Avenue and Bladensburg Road NE; as part of a new mixed-use development on New Jersey Avenue NW; and at East Capitol and 58th streets SE.

As it has when it entered other cities, Wal-Mart's announcement is already is drawing the ire of labor leaders who complain that the company pays substandard wages and provides inadequate benefits. But with an unemployment rate above the national average and many neighborhoods lacking the basic goods and groceries that Wal-Mart says it will offer, several city officials and neighborhood leaders said they would consider supporting the plans.

Wal-Mart said it expects to create 400 construction jobs, generate in excess of $10 million in tax revenue for the District and expand its charitable activities here, focusing particularly on job training and efforts to combat hunger.

"D.C. residents want more convenient access to quality jobs and affordable groceries," said Henry Jordan, senior vice president of Wal-Mart U.S. "We want to be part of the solution and look forward to building even more support for what our brand can deliver."

The Bentonville, Ark.-based company has fared better than many retailers during the economic downturn by emphasizing its low prices. But much of its growth has come from expanding operations overseas. Wal-Mart has been looking for opportunities to grow in the United States, whether it be moving into urban areas or experimenting with stores that rely on far smaller footprints than the traditional one-story, big-box format that dominates so many communities.

In June, for instance, the nation's largest retailer agreed to a deal with the Chicago City Council that gives the company the green light to open its second store in that city by 2012 and two dozen or more stores there in coming years.

Its four D.C. stores will vary from 80,000 to 120,000 square feet, a typical size for the chain. The company is also considering additional stores for the District, including a new pilot format of fewer than 30,000 square feet, according to spokesman Steven Restivo.

"We're continuing to evaluate opportunities across the District, and those opportunities are small, medium and large sites," he said.

The company is also trying to improve its image as an employer. In 2007, Wal-Mart named the Washington area one of 10 "jobs and opportunity zones" across the country, promising to help local suppliers and even teach mom-and-pop shops how to compete with it.

At its stores in Washington area suburbs, Wal-Mart pays an average of $12.49 an hour. Although Restivo would not say what wages would be at its District stores, he said the rates would be above that of most union jobs offered by competing grocers and that most jobs would be full-time positions.

But Thomas P. McNutt, president of Local 400 of the United Food and Commercial Workers, which represents employees of area Giant, Safeway and Shoppers Food Warehouse stores, said Wal-Mart's wage pledges don't change much.

"It doesn't matter what format they bring to the city," he said. "This is a wolf in sheep's clothing."

McNutt said he was skeptical of the company's wage claims, saying the comparisons often do not account for generous benefit packages provided for in union contracts, including health and retirement benefits. "It's total compensation that separates the union market from the non-union market," he said.

Throughout its history, Wal-Mart has often been the target of fierce opposition from local business and community leaders who fear it will drive smaller retailers out of business. In the District, it is unclear what zoning and legislative approvals would be required for the stores to open. The company has already begun briefing city officials on its plans.

Mayor-elect Vincent C. Gray cautiously welcomed the announcement. Gray, who won election in part by promising to tackle unemployment, also received tremendous support from labor unions.

"There have historically been concerns about [Wal-Mart's] labor practices," he said in a brief interview Wednesday night. "I want to make sure workers are treated fairly and earn fair wages."

D.C. Council member Tommy Wells (D-Ward 6) said that he's quite aware of the many arguments against the retailer but that District residents have as much right to low prices as suburbanites do.

"One of the arguments about gentrification and displacement [is that] it's not just about the cost of housing, it's about the cost of groceries and other goods," he said.

Council member Harry Thomas Jr. (D-Ward 5), perhaps the most reliable pro-labor vote on the council, is also assuming a soft stance for the moment. "My number one concern is ensuring we have full-time jobs and labor-based pay rates," he said.

Kamili Anderson, a neighborhood activist who lives near the Georgia Avenue site, said she has some reservations about Wal-Mart, based on its reputation for being anti-union and giving employees paltry benefits. But she said the area has an "urgency" for more retail outlets and that most residents will welcome the proposal - particularly if the company solicits input from neighbors on "what they want to do with the store."

"Anything that could draw more business and more development should be welcomed," Anderson said. "With conditions."

oconnellj@washpost.com debonism@washpost.com

Staff writers Ylan Q. Mui and Nikita Stewart contributed to this report.

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