Urban bets on Walmart are probably a losing wager

From the Harvard Business Review article "Outsmarting Wal-Mart":

The Wal-Mart threat shrinks into proper perspective when you segment the market along the lines of quality, service, convenience, selection, and price and then look closely at where the retail giant really dominates. Wal-Mart clearly wins on price and, to a lesser degree, selection—but nowhere else. Price isn’t everything. Two-thirds of shoppers find Wal-Mart’s assortments, middling product quality, and limited services not worth the savings. That means, regardless of Wal-Mart’s proximity, there are plenty of customers looking for alternatives.

I wrote a lot about Walmart in 2011 and 2012 when DC went all in on supporting the company's move to put 5-6 stores in the city.

I got involved "in my community" on the issue because it's likely to be one of the only places in the US with two Walmarts within a couple miles of each other, and one is about 3/4 mile away from us and we were worried our street would function as a major through corridor to the store.

-- "Lessons from Walmart's foray into Washington, DC"

(To be fair, it hasn't had much of an effect on us personally, and I suppose when I am really lazy and right next to it, a couple times a year I buy a couple of items from the store.  For various reasons I don't shop at Walmart, but I don't feel a need to impose my choices--at least with regard to Walmart--on others.)

I co-chaired a committee of our Advisory Neighborhood Commission which produced a report (ANC4B Large Tract Review Report on Walmart) aimed to shape how the city and elected officials dealt with the proposal to build a store on Georgia Avenue NW.

Why elected officials were so hot for Walmart is beyond me--well, they see the value in providing low skilled jobs--because Walmart usually results in the business failure of many local retailers ("A paper on Walmart that I wished I'd been aware of back when DC was happily recruiting the company to the city").

Although lack of certain retail options in the city meant that probably there'd be less impact than normal, compared to other places.

Furthermore, it was mostly b.s. that Walmart's entry into the city would address "food desert" issues and the lack of conveniently available supermarkets.  In every area where the company is putting stores, there are nearby existing supermarkets within 1 to 2 miles.

Sadly, the recommendations in the report--focused on making a better project--were ignored, because the Office of Planning and other city agencies weren't ordered to make the project(s) better, they were ordered by the elected officials to make the Walmarts happen (Temper Walmart Glee with Planning," Washington Business Journal.

After I submitted the report, I kicked myself, because it didn't address Walmart's customer service issues.

While the company may offer low prices, the reality is that it comes at a cost--the stores have a limited selection, can be dirty and messy, tend to be under- or out-of-stock on many items, and are understaffed.  Does DC or any other city want to make commitments to a company that is on the decline?

And nationally, unfortunately, pro-urbanists and smart growthers have used the company's foray into the city as a way to claim that national retailers are now pro-city, when that is an overstatement, as many of the stores, including some of Walmart's stores in DC, are single use buildings, not mixed use.

-- "Walmart: in the city vs. of the city"

Frankly, while the Georgia Avenue store--open for almost two years now--isn't dirty, it is quite messy, frequently understocked and out-of-stock, and doesn't have enough staff so lines are long and slow, etc.

Since that store and one other have opened in the city, Walmart has announced wage increases, and various other initiatives, but frankly, the company continues to decline and most retail analysts don't see the company turning around any time soon ("Aldi's on point, Walmart's not: Part 3 of SN's roundtable series," Supermarket News).

That a Walmart is coming to DC's Skyland Center (D.C., Safeway ink Skyland deal. Here's what that means for the Wal-Mart-anchored project,") as was reported yesterday by the Washington Business Journal is hardly cause for celebration, even if that area has been under-stored in terms of apparel and hard goods (furniture, appliances, electronics) since stores like Sears shut down.

Not to mention that the store, which will gross about 55% of its revenue from groceries, is within two miles of both a Safeway store at the Good Hope Marketplace shopping center, and a Giant Supermarket at the Congress Heights Shopping Center.

How much demand is there to support three full-line supermarkets in that area?