Wal-Mart Plans Stores in Ailing Urban Areas

Wal-Mart Stores Inc., which has struggled to expand into urban areas, said Tuesday that it would build 50 stores in big-city neighborhoods suffering from high crime, unemployment and other problems.

At the construction site for a new store on Chicago’s West Side, Chief Executive H. Lee Scott Jr. said the Windy City’s first Wal-Mart also would anchor the company’s first “jobs and opportunity zone.” The program, being launched at 10 of the stores, will give money and advice to small businesses, suppliers and community groups in the areas around the stores.

“We see that we can be better for local communities than we have been in the past if we are willing to stretch our resources,” Scott said, speaking to reporters on a conference call. “We believe it’s going to be something that is good for both of us.”

The world’s largest retailer, with 3,800 stores and 1.3 million employees in the United States, has looked increasingly to urban areas along the West and East coasts and in Chicago for its next wave of growth, particularly as sales within its existing store base have slowed.

But those same regions also have stronger ties with organized labor and community activists opposed to the nonunion employer for what they say are its paltry wages, inadequate health benefits and a disregard for local businesses that can’t compete with Wal-Mart’s rock-bottom prices.

Inglewood voters, for example, two years ago rejected a Wal-Mart-sponsored referendum that would have allowed the company to build a store between the Forum and Hollywood Park without the usual city oversight.

In a statement, Paul Blank, the campaign director for the union-backed group WakeUpWalMart.com, said Tuesday’s announcement failed to address any of those labor and competition issues.

“In the face of a faltering public image,” Blank said, “Wal-Mart seems determined to launch almost daily public relations stunts that speak loudly about change but fall terribly short.”

Wal-Mart said it would announce locations for the new stores in coming months. They will be built in the next two years.

In addition to economically challenged areas, the company said locations could include malls in need of revitalization and vacant buildings.

Wal-Mart itself has been accused of causing blight by vacating buildings, as it closes and relocates dozens of stores each year. The company began the fiscal year with 129 vacant buildings, a spokesman said.

The new stores will create 15,000 to 20,000 new jobs and more than $100 million in state and local taxes, Wal-Mart said. Those being built this year are included in previously announced plans for 335 to 370 new U.S. stores in 2006, Scott said.

The opportunity zone program, the company said, is aimed at helping small businesses “capitalize on the benefits of having a Wal-Mart store in their community.”

In addition to being turned away in an Inglewood referendum, Wal-Mart has suffered setbacks in the Queens section of New York and in an attempt to build on Chicago’s South Side. The company ended up moving two blocks from the Chicago city line to open a store in Evergreen Park, Ill.

In an interview after Tuesday’s announcement, Scott said the new programs were part of the company’s efforts to address diversity issues and to reach people “who may wonder about us.”

“It’s part of the maturation of our company as we adjust to the size and the scope of our company,” he said. “We just want to move past the criticism and the issues.”

In a speech Tuesday to the Newspaper Assn. of America in Chicago, Scott also indirectly took on another criticism of his company.

Community papers have long accused Wal-Mart of driving out the small shops that also are big local advertisers. Wal-Mart, by contrast, has been accused of favoring free newspaper stories over paid ads.

“We are committed to finding ways to do more,” Scott said, noting that the company has spent about $73 million a year on newspaper ads.