Wal-Mart to Open Stores in Blighted Areas

By Emily Kaiser

CHICAGO (Reuters) – Wal-Mart Stores Inc., under fire from a host of critics for its business practices, on Tuesday said it would open more than 50 stores in distressed areas and help small businesses around those locations thrive once the discounter moves in.

The world’s biggest retailer, often blamed for driving smaller stores to close, said it would offer business development grants to nearby companies and give them free in-store advertising as part of a new economic development program.

Wal-Mart will also hold seminars for minority and women business owners on how to become Wal-Mart suppliers, as well as seminars for all surrounding small businesses on how to compete in a community with a Wal-Mart.

The moves come as Wal-Mart faces increasing opposition to expansion, particularly in urban areas such as Chicago, Los Angeles and New York. The retailer plans to open its first Chicago store this summer — and employ about 400 workers — but the nation’s third-largest city rejected Wal-Mart’s bid for a second location.

"I do not believe that companies wake up in the morning just being altruistic," Wal-Mart Chief Executive Officer Lee Scott told reporters at the site of the new Chicago store. "As you mature as a company, you find out that existing in these communities is a two-way street."

Labor groups, environmentalists and others contend that Wal-Mart devours green space, drives competitors out of business and pays poverty-level wages. Political opposition is also mounting as dozens of states consider legislation that would require Wal-Mart to pay more for health care.

Wal-Mart is eager to prove it can be a good corporate citizen, and has tried to mollify critics through programs such as a lower-priced health-care option. It recently promised to reduce the waiting time for part-time employees to qualify for health insurance.

Wal-Mart stepped up public relations efforts in the past year as two union-backed groups — Wake Up Wal-Mart and Wal-Mart Watch — launched grass-roots campaigns to draw attention to Wal-Mart’s employee benefits, treatment of suppliers and other issues.

A study by researchers at the Public Policy Institute of California found that Wal-Mart stores reduced retail sector employment by as much as 4 percent because smaller stores closed when Wal-Mart arrived.

JOB ZONES

As part of the new economic development program, Wal-Mart plans to establish 10 "jobs and opportunity zones," with the first one surrounding the new Chicago store.

"The zones will encompass the Wal-Mart store and a host of local businesses and suppliers with which Wal-Mart will work to increase job creation and economic opportunity in surrounding neighborhoods," Wal-Mart said in a statement.

Wal-Mart plans to open more than 50 stores over the next two years in neighborhoods with high crime or unemployment rates, on sites that are environmentally contaminated, or in vacant buildings or malls in need of revitalization.

Scott said Wal-Mart hopes that such efforts will help the retailer win support for new stores, noting that the Wal-Mart location that Chicago rejected was on a contaminated site in a neighborhood in need of jobs.

"We want to make our offering so compelling that the politicians, regardless of the pressure they are under, know that the best way to serve their citizens is by allowing a Wal-Mart store to move in," he said.

After Chicago rejected the store, Wal-Mart built one just outside the city limits instead. Scott said that store was "exceeding our wildest expectations."

But if Scott hopes to win over Chicago’s politicians, he may want to brush up on the lingo. He mistakenly called Alderman Emma Mitts — who was instrumental in getting the first Chicago store approved — "Congresswoman Mitts."