D.C. Wage Rift Puts Spotlight On Wal-Mart's Urban Push
Wal-Mart's long-standing plans to come to Washington, D.C., are now up in the air. The City Council passed a living wage law that would require the world's largest retailer to pay $12.50 an hour, more than the city's current $8.25 minimum wage.
So Wal-Mart is saying it will abandon three of the six stores it planned to build in the District, and is evaluating whether to forge ahead with the remaining stores currently under construction. The case highlights some of the difficulties — and opportunities — big-box stores sometimes face entering urban markets.
D.C. Councilman Vincent Orange is not a big-box store hater. "I was very instrumental in bringing Home Depot and Costco to town, and back then we had to provide incentives to give entities to come into town," he says.
But Orange, who chairs the council's business and regulatory affairs committee, says Wal-Mart can afford to pay employees more. A decade ago, D.C. courted retailers and offered tax incentives. Now, the city's population is growing and is well to do — and Orange says that gives Washington the upper hand.
"Whereas before, back in 2002 and 2003, we were begging entities to come to the city, we wanted what they had. And now they want what we have," he says.
Indeed, cities are a key growth area for big retailers. Rob Grossman, a partner in Deloitte's real estate consultancy, says the exurbs and suburbs are already saturated with big-box stores.
"The landscape is such that the market is pretty much covered, leaving the urban markets as kind of the last untapped market," he says.
The Two-Way
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