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Wal-Mart Meets Resistance Over Expansion in New York

NEW YORK — There appears to be no shortage of New Yorkers with negative opinions about Wal-Mart Stores Inc.<BR><BR>Opponents of the world’s biggest retailer, which has proposed building in the Rego Park section of Queens, said during a...

NEW YORK — There appears to be no shortage of New Yorkers with negative opinions about Wal-Mart Stores Inc.

Opponents of the world’s biggest retailer, which has proposed building in the Rego Park section of Queens, said during a hearing of the New York City Council committee of economic development Thursday that a Wal-Mart would devastate small business owners, eliminate shopping choices for consumers and dramatically change the local retail landscape.

Led by Brian McLaughlin, president of the New York City Central Labor Council/AFL-CIO, small business people and community leaders announced a coalition opposing unchecked development of Wal-Mart stores in the city. In addition to the potential economic impact, the group cited unfair labor practices — including sexual discrimination, prohibitively expensive medical insurance and substandard wages for Wal-Mart employees — among its concerns. The coalition drew support from several council members.

“The legacy of Wal-Mart is not lower consumer prices, but lower standards for hardworking men and women,”  McLaughlin said.

Wal-Mart spokeswoman Mia Matson said in a statement that the retailer “is eager to make New York City its next retail frontier…[and] there are several store sites which we are considering. We believe Wal-Mart would be an extraordinary asset to the local economy.” According to Wal-Mart, preliminary research indicates that the company would create 300 to 350 jobs and generate as much as $5 million in property and sales taxes for each shopping center that it opens in New York.

The company has come under increasing scrutiny and has run into resistance in several locales in the U.S. as it seeks to expand in more metropolitan regions. Voters in Inglewood, Calif., a diverse Los Angeles suburb, last year defeated a ballot initiative to allow construction of a 60-acre Wal-Mart complex. Meanwhile, a federal judge last year gave the go-ahead to what is said to be the biggest workplace bias lawsuit by extending a discrimination complaint of several Wal-Mart female employees to 1.6 million current and former workers.

In addition to its Queens plans, the company is seeking to build in White Plains, N.Y., north of the city, and has opened a unit in Secaucus, N.J., just west of the city.

This story first appeared in the January 7, 2005 issue of WWD.  Subscribe Today.

McLaughlin charged that Wal-Mart’s business model eventually raises consumer costs. After local retailers are wiped out by discounts, McLaughlin alleged that Wal-Mart raises its prices without fear of competition. Ultimately, small business owners and their employees who lost their jobs have no option but to shop at Wal-Mart, he said.