Wal-Mart’s win in Chicago could pave wave for big urban push
Chicago The Chicago City Council’s unanimous vote on Wednesday to approve a zoning change that clears the way for construction of the city’s second Wal-Mart may also open the way for a big push by the retailer not only in Chicago but urban areas throughout the nation.
“On the corridor from Boston to [Washington] D.C., Wal-Mart is so under-penetrated,” said David Strasser, an analyst with Janney Montgomery Scott, in The New York Times. “That opportunity is tremendous, and if you’re seeing that mentality from the unions in Chicago, you’re going to see that in the northeast corridor.”
The vote to allow a Super Wal-Mart to be built on Chicago’s Far South Side came after a six-year battle that pitted Wal-Mart, Chicago Mayor Richard Daley and the Chicagoland Chamber of Commerce against unions, labor-backed aldermen and various social activists.
But with the recession and high unemployment, the promise of the jobs and the tax revenue that the new store would create have dimmed some of the opposition. However, to win approval from politicians and other groups, Wal-Mart also made some concessions. For example, the Chicago stores will all be union-built. Also, the company agreed to an entry-level wage of $8.75 an hour, 50 cents above Illinois’ minimum wage, with a raise of 40 cents to 60 cents an hour after one year.
Several days prior to the vote. Wal-Mart said it was planning several dozen stores in Chicago that would add 12,000 jobs over five years, and more than $500 million in sales taxes and property taxes for the city, according to the company’s estimates.
“We have already started to identify additional opportunities across the City that will help more Chicagoans save money and live better,” Hank Mullany, executive VP and president of Wal-Mart’s northern U.S. division, said in a statement following the vote.
NCR expands Blockbuster Express kiosks in the South
DULUTH, Ga. NCR Corp. announced the expansion of its Blockbuster Express-branded DVD kiosks in Tennessee and the mid-South with a deployment at Mapco Express convenience stores.
Mapco Express currently operates more than 400 locations in nine states across the Southeast.
“Mapco Express customers throughout the southern United States will now have quality entertainment choices available to them at any hour of the day,” said Alex Camara, Vp and general manager, NCR Entertainment. “Convenience stores across the country are recognizing that conveniently-located Blockbuster Express kiosks improve the everyday shopping experience of customers.”
Cautiously, Lowe’s chief looks ahead
What’s it going to take for a robust recovery in the home improvement industry? According to Lowe’s CEO Robert Nibllock, two things — home prices must bottom and the job market must improve. When is that likely to happen? Next year, “in all likelihood,” he said.
Niblock made his remarks at the recent Jefferies & Co. Global Consumer Conference in Nantucket, Mass., where he told investors that the company is beginning to see some encouraging signs. Not only did the first quarter present the first positive comp-store number in 15 quarters, he also pointed out that 21 of the company’s 23 regions had positive comps. Gulf coast regions facing difficult comparisons with quarters bolstered by hurricane-related spending were the only exceptions, he said.
The second quarter of 2010, however, won’t have the twin benefits of Cash for Appliances program or the Homebuyer Tax Credit, which expired April 30. And one other thing: the first quarter had ideal weather for home improvement retailing.
“We still think that there’s some headwinds out there that make us cautiously optimistic as we look over the balance of the year. Particularly, we think consumers are closely monitoring housing value trends, as well as the employment landscape,” Niblock said.
Niblock and his team have studying consumer patterns very carefully in this year of transition, and the overall picture looks better than last year. “We think overall, as we look out into the future, consumers are less cautious than they were previously for the U.S. economic outlook,” he said. “I think they believe that the worst of the financial crisis and the impact of the recession that we’ve been through is behind them, but they still know that we’re not out of the woods yet.”
Cost containment will play a major role in the success of the company during the transition year — and the company’s new (rolled out in the third quarter) Facilities Servie Associate (FSA) positions are designed to provide an in-house alternative to outsourced facility management. “We decided that by hiring our own dedicated person, doing ti in-house versus outsourcing it on a contract basis, we could get better executing, quicker response to issues that take place and ultimately a lower cost.”
Next year, the company intends to reap benefits from what it calls its Integrated Planning and Execution (IP&E) — enhanced product assortment and replenishment systems — “to make sure that we improve our local assortments and make very sure that we have the right product in the right market at the right time.”