Neighborhood Retailers Aim to Keep New York Wal-Mart Free

Date: 10 May 2005 | posted in: Retail | 0 Facebooktwitterredditmail

“The entry of Wal-Mart into New York City is the biggest challenge to neighborhood businesses and local communities in our city’s history,” contends Richard Lipsky, head of the Neighborhood Retail Alliance (NRA), which has been an advocate for New York City’s locally owned businesses for the past twenty years.

Wal-Mart, which has largely saturated small towns and rural areas, recently declared New York City to be its next “frontier.” Industry observers believe the company will likely seek to open dozens of superstores throughout the city.

But so far the retailer’s plans have been thwarted by a diverse coalition, which includes the NRA and numerous labor unions and community organizations. Earlier this year, a developer quickly dropped a proposal to build a Wal-Mart supercenter in Queens, largely because of the coalition’s vigorous opposition to the plan.

Now the fight has moved to Staten Island, where Wal-Mart has identified two sites for superstore development.

Lipsky argues that superstores are a threat to the vitality of the city’s neighborhoods. He says there are 400 neighborhood business districts in New York, many of which are anchored by local grocers and other stores that would be undermined by the arrival of big-box chains like Wal-Mart. “The loss of small business is the first step in the decline of neighborhoods,” Lipsky says.

Dependence on chain stores also carries risks, Lipsky contends. When the city was going through hard times in the 1970s, chains like A&P pulled out, leaving many neighborhoods without basic goods and services. “As soon as things got a little dicey, they closed up and moved out to the suburbs,” says Lipsky.

Independent entrepreneurs came in and filled the void. “If the city really wants to see bigger stores built, why not work with the independents?” Lipsky asks. “They’re the ones that have taken the risk during hard times. They’re the ones that have contributed to the communities.”

The NRA has a substantial track-record blocking big-box development. Working with neighborhood groups, the alliance defeated two Costco stores slated for Manhattan and a BJ’s wholesale club proposed in the Bronx. In the mid-1990s, the alliance, in partnership with over 100 merchant groups and 70 civic organizations, thwarted an attempt by Mayor Rudolph Giuliani to rezone much of the city’s industrial land for megastore development.

The NRA is now campaigning to convince the city to conduct an in-depth analysis of the potential aggregate impact of big-box retail in New York. The group also wants the city to improve the process for evaluating superstore proposals to give the public more time and authority to review and block development projects.

Lipsky says working with unions in not a stretch for his group. Over the years, many independent grocers, the NRA’s primary constituency, have become unionized and offer substantially better wages and benefits than big-box chains. The NRA is backing the Health Care Security Act, an ordinance put forth by unions and community organizations that would require companies in certain industries, including retailers that sell groceries, to provide health insurance to their employees or contribute to a public health insurance fund. Supporters say the measure would level the playing field between responsible businesses and companies like Wal-Mart, which offers health insurance, but most of its employees either do not qualify for or cannot afford the plan.

The NRA is also advocating for city’s small businesses on other fronts. The group is working to overturn an ordinance passed last fall that would transfer ownership of 300 independently owned newsstands to a single corporation. And the NRA is fighting the city’s plan to evict two dozen local food wholesalers from the Bronx Terminal Market. The city intends to hand the property over to a private developer, possibly for the construction of up to one million square feet of big-box retail. The NRA opposes big-box development on the site and insists that the city secure a new location for the wholesalers together, not individually, because they function as a coherent market, generating some $300 million in revenue annually.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.