Don't Get Too Worked Up About This New 'Walmartization of NYC' Study
A new study came out today from a labor-backed nonprofit called Alliance For a Greater New York (Align), and it presents a kind of doomsday scenario in which Walmart could open a whopping 159 stores in New York City. According to the study, if Walmart entered the NYC market this way, it could result in a net loss of almost 4,000 jobs, workers would lose on average 353 million dollars in wages per year, and there would be an increase in workers who must rely on public assistance to make ends meet. But how likely is this scenario? (Not very).
Align's Josh Kellermann told us on the phone today that "premise is what would happen if Walmart achieved its national market share in groceries in New York City." According to the press release we received, "It looks closely at Walmart's market share in the grocery industry across the U.S. and rigorously calculates the minimum number of stores Walmart would likely need to build in New York City in order to reach a corresponding level of market share here."The average grocery market share figure is 21 percent, and it's how Align came up with its number of 159 potential stores. The stores, according to Align's projection, wouldn't all be supercenters; the majority would be Walmart Express stores, which are smaller-format versions of Walmart that don't require a huge commercial lot.
There's no question that the company is eyeing New York. A Walmart spokesman told us yesterday that "it's no secret we're evaluating opportunities across all five boroughs." Walmart is buoyed by public opinion; polls over the summer showed that a majority of people in NYC support Walmart coming here. The chain's biggest problem with regard to New York is political and labor opposition, and even that they don't really care about or need to care about: as this NY1 report from July points out, "the retailer is expected to look for sites where it will not need City Council approval to open up shop. For that, all Walmart really needs is a commercial zone, and there are plenty of them scattered across the five boroughs."
Walmart has responded in aggressive tones on its New York City website:
Their "Walmartization" of New York forecast is that we'll somehow open 159 stores here overnight; a guess based on our current market share across the country. The fact that any national market share we currently enjoy took five decades to achieve is somehow lost on them and shows the depths to which they will sink to try and manipulate reality. We assume their other predictions are based on their favorite recycled - and since debunked - talking point that the city would lose three jobs for every two Walmart creates.
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Regardless of Walmart's hyperventilation here, it is true that Align's study hinges entirely on a huge "if." The only way they can come up with all those worst-case-scenario numbers is if Walmart follows the script of quickly flooding the NYC market with stores, which, honestly, seems incredibly unlikely given the PR fallout that would inevitably ensue.
So don't get freaked out. Walmart is most likely coming to New York soon, but probably not in a tidal wave like this report is saying.
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