Cover Story: Walmart cometh
The big-box retailer and progressive's worst enemy moves closer to the heart of metro Atlanta
Carter Joseph saw firsthand what Walmart did to his hometown of Georgetown, S.C. The shuttered businesses, the bones of local stores that died when the big-box retailer opened a Supercenter just down the street.
"Walmart to me represents capitalism at its very worst," he said on Feb. 23 to a crowd of more than 250 people in the commons room of a church just half a mile north of Decatur. "Capitalism on steroids. Architecture at its worst."
Joseph lives less than one mile from Suburban Plaza, the mammoth shopping center which Selig Enterprises, the Atlanta-based developer, plans to redevelop with a 149,000-square-foot Supercenter as an anchor. Since news about the plan broke late last year, neighborhood residents have hammered out nonbinding agreements with the big-box retailer and developer over everything from bicycle racks to the location of wall signs. Others in this walkable, progressive burg (such as those in attendance tonight) have contributed more than $1,000 to hire a lawyer and spent Friday afternoons holding signs at the nearby intersection protesting Walmart.
Eyes wide with anger and fingers pointing to the ground in defiance, Joseph warned of doom should the big-box retailer join the neighborhood.
"They treat their employees like dirt," he said. "They treat their suppliers like dirt. And they'll treat this neighborhood like dirt, as they've treated countless towns and communities across this country."
Suburban Plaza isn't the only place where Walmart, which operates only five stores inside the Perimeter, has cast its gaze. Nearly 60 miles away in Athens, the college town — and even some of its progressive factions — has become divided over Selig's plans to transform several parcels on the edge of downtown into a 10-acre, mixed-use development that would most likely include a Walmart. Meanwhile, in Vine City, the historic and impoverished Atlanta neighborhood less than two miles from downtown's skyscrapers, the big-box retailer finally broke ground on an abandoned Publix it plans to expand into a store offering groceries, a pharmacy, and financial services.
After nearly 50 years of conquering rural and suburban America, Walmart has focused on its final frontier: U.S. cities. Since the early 2000s, the company has invested considerable political will (and cash) trying to elbow its way into urban areas such as Los Angeles, Chicago, and New York. The moves, which usually feature nasty drag-out fights with unions and agreements with neighborhood groups, ride on the promises of lower prices and more jobs. But after years of anti-Walmart websites, documentaries, and studies questioning whether the retailer's cutthroat business tactics and treatment of its employees are worth the cost savings, opponents are better prepared to push back against the mega-retailer that, according to one estimate, controls 33 percent of the grocery market. And for many — but not all — of the proposed stores, the battle to defend one's turf from terrible design, questionable labor policies, and low-cost goods that don't come from Target, has begun.
"This is a war," Donald Stack, a land-use attorney hired by the resident opposition group which wrangled the residents at the church on North Decatur Road. "It is a war for your community. It is a war for your property values. It is a war for your safety."
That may be true. But it's not a war that Walmart figures to lose unless circumstances change. The outcome may be inevitable for three reasons: the big-box retailer is no longer viewed by everyone as inherently evil; Atlanta's elected officials would be held accountable if they don't support the creation of jobs, no matter how menial; and Walmart has a tested blueprint for these scenarios.
That said, the debate over the real cost of low prices is important to each community and the city at large. And it has begun close to home.
In the early 2000s, Walmart, the company that built a billion-dollar business model by opening massive big-box stores and undercutting competitors' prices, started launching aggressive campaigns to open locations in inner-city areas. Walmart began experimenting with smaller store formats that could fit more neatly into dense urban areas, from the 42,000-square-foot "neighborhood market" model, or even smaller. It played nice with community residents and begrudgingly paid attention to labor unions. City-specific websites were also unveiled to, in the company's words, "help separate the fact from the fiction" by debunking studies and trumpeting local acts of corporate do-goodery. (Walmart registered WalmartAtlanta.com last November; the site is currently vacant.)
Chicago's now home to four Walmarts. In Washington, D.C., the store opened its first location inside the Beltway in 2007 and plans to open six more before the end of the year. Nowhere has the fight for falling prices been more heated than New York City, where, according to New York magazine, the company has spent more than $13 million on charitable causes since 2007. The retailer also has donated to politicians' pet projects and charities, including $4 million to a youth-employment program supported by the city council speaker and more than $380,000 to renovate the food bank.
"Walmart is unquestionably making more of a push for urban areas," says Charles Fishman, an investigative journalist and author of The Wal-Mart Effect. "If Walmart wants to grow in the U.S., the only place to grow is in cities."
"We are interested in urban areas," says Walmart Spokesman Bill Wertz. "But we're interested in rural areas as well. We're interested in being where our customers want us to be. ... It's a question of finding spots where all the factors come together and allow us to go forward. A lot depends on geography and other factors — including the interest of the community."
The big-box retailer's entry deeper into the heart of Atlanta — "We definitely have plans to grow in Atlanta," Walmart Southeastern Division Senior Vice President of Divisional Operations Greg Sullivan told the Atlanta Business Chronicle last July — comes without much of the baggage it has encountered in other cities.
Sure, local residents stomp their feet and roll out study after study about sweatshops, predatory pricing, impacts to local economies, and miserly wages paid to employees. But Georgia, much like the rest of the South where the big-box retailer blossomed, has weak labor laws that give unions less influence. And the Walmart has long been part of metro Atlanta's (and Georgia's) landscape. The Peach State is home to more than 135 Supercenters — 20 of which are within a 20-mile radius of Atlanta. And with low employment, food deserts, and vacant commercial real estate aplenty, it would appear that Walmart wouldn't exactly be turned away should it choose to venture closer to the heart of the metro region.
Why Walmart remains a retail force — even when its profits are running relatively flat — comes down to the fact it's such a behemoth. It's not just that the company is one of the only retailers willing to build stores with smaller footprints, which are necessary for cramped, urban areas, says Scott Selig, the firm's vice president of acquisitions and development — it also has the cash.
"There are very few developers who can front an $80 to $100 million check to go ahead and develop the property," he says. "It's not easy like it was years ago to get money for any kind of development. You need financially strong players to anchor a tenant. That anchor brings in other people. When it brings in the mass of people, that becomes enticing to other retailers in the country who before might have said, 'You don't have the mass.' Having Walmart gives validity to the project in the eyes of the retail world."
Sixty miles apart, two separate protest movements are pushing back at Selig's plans to bring Walmart closer and closer to where more and more people call home. When news broke late last year that Walmart was linked to a development in downtown Athens, it was akin to announcing that Pepsi planned a museum in downtown Atlanta. Pleas from locals and UGA alums to sign petitions appeared on Facebook and landed in inboxes. In December, Patterson Hood of the Drive-By Truckers recorded a song to raise awareness about the proposal with some of Athens' most well-known musicians, including Mike Mills of R.E.M. and John Bell of Widespread Panic. In early February, an angry Walmart opponent filed paperwork to recall Mayor Nancy Denson, who's supporting the proposal. (The initiative went nowhere.) In early March, the city's Occupy movement pitched tents outside city hall demanding open, public meetings, which the mayor and Selig have rebuffed.
There's a good reason why the locals reached for their pitchforks. When downtown stores left Athens in the 1980s and for the new mall five miles from the city center, Athens' musicians and artists claimed the walkable area across the street from North Campus as their own. Out went the department stores, in came the 40 Watt Club, where R.E.M. played its first concert, independent restaurants, and yes, enough bars to destroy one's liver many times over. A gritty, bustling, vibrant downtown with a thriving economy has grown organically.
"People in this state have a love affair with Athens," says Jim Adams, an optician who moved to the college town from Atlanta 30 years ago. "The good ole boys came here. They love to come on football weekends and act like they're still 20 years old and act like idiots. They like it because it's different from where they live. But now we're approaching where we're like a Macon or Tifton. That's not a good thing."
There's long been a problem with downtown Athens — one the people who live in the converted lofts above bars and burrito joints, the new high-rise apartments, the sleepy residential neighborhoods just on its outskirts, or the public housing a few blocks north know all too well: it's a food desert. Despite an abundance of restaurants and a growing culinary scene, visiting a grocery store or supermarket requires a trip by car or bus. (I can vouch for that — I lived downtown during my final year at the University of Georgia.) In addition to boosting tax revenues and providing jobs, the developer has argued (with the gleeful support of the Athens Chamber of Commerce) that Selig's proposal would finally give nearby residents a place to buy fruits and vegetables.
Nothing wrong with that. But the firm's design envisions building a mixed-use retail, restaurant, and residential complex anchored by a 94,000-square-foot retail store — which, by most accounts, will be a Walmart — on what's called the former Armstrong and Dobbs parcel just a few blocks from downtown. (A company spokesman stresses that Walmart has not committed to the site.) The land sits on one of the area's main arteries — which by all accounts is already clogged — into and out of downtown.
Two groups have launched campaigns in Athens: People for a Better Athens, which is more focused on public protest, and Protect Downtown Athens, which is trying to shape Selig's preliminary plans to lessen potential damage on downtown. The latter has focused on the proposal's traffic risks, wonders how the development will align with an adjacent (and expensive) bike trail project, and questions if the Selig plan meshes with the rest of the community. For them, the problems stem not so much from the brand, but the proposal's proximity to and effect on downtown.
Bob Sleppy, the executive director of Athens nonprofit Nuci's Space and one of Protect Downtown Athens' most vocal members, thinks the scale of the proposed development — with nearly the equivalent retail space of all downtown Athens, "you're essentially creating an alternate to downtown" — and potential traffic spell disaster. Even if the proposed tenant were Trader Joe's or Target. "I love Taco Stand," Sleppy says, referring to a popular Mexican restaurant. "Would I like a 94,000-square-foot Taco Stand right there? No."
Selig defends the design and says it has been tweaked to address residents' concerns, which offers little comfort to critics.
"I think they want to build a good project," Sleppy says. "I just don't think they have a good understanding of how it will complement Athens."
At about the same time as the Athens protests, residents of the sleepy neighborhoods outside Decatur learned that Selig planned to redevelop its antiquated Suburban Plaza, replete with a new 149,000-square-foot Supercenter. Opened in 1959, the shopping center is the textbook suburban strip mall — a sea of asphalt parking with retail, including a Big Lots anchor store, set back from the busy streets. The developer plans to bulldoze the retail strip west of Piccadilly Cafeteria, which includes the Last Chance Thrift Store, and build the store closer to the street. Cars would park in an underground garage, which Selig calls a "huge accomplishment" for a mammoth retailer.
The proposed design is the first phase of what could, over the years, become a more walkable shopping center development akin to the Edgewood Retail District.
Dropping the big-box retailer in such a well-populated, high-traffic area could easily convince Emory University professors, Centers for Disease Control and Prevention germ detectives, or any of the thousands of other motorists who use Scott Boulevard each day to stop and pick up laundry detergent or paper towels. According to news reports, so-called "junior anchors" which typically follow Walmarts — a gym, arts supply store, and an electronics retailer — have expressed interest. The developer has even told community members the result would be "Decatur funky." ("Everyone just shook their heads and said, 'What is that?'" said one nearby resident who attended the meeting.)
In response to Selig's plans, a group of residents in the adjacent Clairmont Heights, Decatur Heights, and Medlock Park neighborhoods have mobilized under the moniker Good Growth DeKalb and promised to battle the proposal. On recent Fridays, members picketed at the six-point intersection where the Suburban Plaza Walmart will stand. The group — which at a recent meeting raised more than $1,000 in contributions in less than two hours — has hired an attorney with experience fighting the big-box retailer and started brainstorming alternate uses for the property. (One idea: capitalize on its strip-mall past and returning it to its 1950s retro glory.)
"We've got all these stores that are serving the area," says Melanie Parker, an artist who lives nearby. "People are happy with what they're getting already. We don't have a need for this."
Simmering under each and every claim is the fear that the retail chain, with its low prices, cutthroat business style, advanced supply chain, and deep pockets, will cripple existing businesses. Business owners like Tony Powers of the Intown Ace Hardware a few hundred feet from Suburban Plaza, and Bill Horton, who manages the downtown Athens pharmacy his family's owned since the 1940s, both sell items that will most likely be replicated by the big-box retailer. Both say that they excel at providing something Walmart can't match: customer service. As Power says: "You can't walk in a Walmart and ask someone what the mixed ratio is for a gallon of Roundup."
Walmart typically offers two defenses: its stores offer a high volume of low-priced goods that could save families and small businesses money, and nearby stores benefit from the additional foot traffic. It's the "everyone wins" argument. Study after study has said that's not the case — Walmart critics usually say that for every job Walmart creates, one-and-a-half retail jobs are lost in the community. And probably just as many studies have cast doubt on that statistic. But when it's framed simply as an argument about jobs or labor issues, the debate misses the important question: Is what's being proposed, regardless of brand, right for the community? (Many Athenians interviewed by CL readily admit that they'd tolerate a Walmart on the site if it was of appropriate scale and it offered groceries.)
"If it were Home Depot, would people be opposing it?" asks Fishman, the author of The Wal-Mart Effect. "If it were any national brand, the questions would be the same: How do we smartly knit this kind of national chain in a community that doesn't have them now? And that goes for Olive Garden or ChiChi's or TGIFriday as much it would go for the Walmart."
Based on what's been proposed, the size and scope of the Selig developments most likely already fall under current zoning requirements. But neither proposal is a done deal and probably require some form of approval by the county — and, because a road fronting Suburban Plaza is overseen by the state, the Georgia Department of Transportation.
Residents and existing businesses (especially those surrounded by empty lots) that want to prevent Walmart and other big-box retailers from encroaching on the tight-knit communities they've nurtured through white flight (decades ago) and gentrification (more recently) could push elected officials to re-examine what is permitted.
Unfortunately for the residents fighting the current proposals, Athens planning officials only recently recommended that the city limit the size of retail businesses, which could include the Selig concept. DeKalb recently wasn't selected for a planning grant which could have reimagined what kind of development would be permitted in the area surrounding Suburban Plaza. While such a move might not be the life preserver for which Walmart critics had hoped, it could prevent the opening of other big boxes.
In the meantime, residents wait for Walmart's next move.
Arguments about the aesthetic beauty of national retailers must seem pretty precious in the food desert of Vine City, the historic yet beleaguered neighborhood less than two miles west of downtown's skyscrapers.
On Christmas Eve in 2009, Publix locked its doors for good on the store in Historic Westside Village, a mixed-use revitalization effort in Vine City that hit the skids when the housing market tanked. Residents, many of whom are elderly or living on low incomes, lacked convenient access to fresh food. For months, city officials and Russell, the village's well-connected developer, sought a new tenant to move into the shell of the grocery store and serve the impoverished community, which was now a food desert.
"Every grocer that was out there was solicited," says Councilman Ivory Lee Young Jr.
Almost one year later, Mayor Kasim Reed, city officials, and community members braved frigid temperatures to announce that a company had bit: Walmart. (Rosalind Brewer, the CEO of Sam's Club, a Walmart subsidiary, is a graduate of Spelman College, which is part of the nearby Atlanta University Center. Incentives likely also played a role, CL has learned, although could not confirm before publication.) Rather than voice concern about the big-box retailer's impact on the hair salon across the street or the restaurant a few doors down, residents worried about whether the company would be able to turn a profit, combat crime, and remain in the neighborhood.
Thanks to negotiations over appropriate buffers between the proposed Walmart, which will expand the Publix's existing store to more than 70,000 square feet, construction has been delayed. Nonetheless, many residents remain optimistic.
"It's welcome," says Makeda Johnson, the chairwoman of Neighborhood Planning Unit that includes Vine City and English Avenue. "We are a food desert. We have people living here who don't have access to transportation and to fresh food."
Young isn't too concerned about the junior anchors moving in and filling the nearby retail strip with franchises before the neighborhood even gets a chance to rekindle its entrepreneurial spirit.
What opponents don't understand, Young says, is that no other grocers were thinking of locating there, even with public incentives. And the big-box retailer appears to be playing its cards right. Young says company executives don't plan to duplicate any services in the corridor and have held meetings with the area's merchants association. In addition, Walmart has shown preliminary interest in helping start a community improvement district, a self-taxing organization of businesses to help fund nearby infrastructure improvements. Walmart spokesman Glen Wilkins says the company is considering donations to nearby technical schools, churches, and community groups.
Even with the promises of short-term progress, some residents are concerned about what happens years down the road. The Supercenter could become a major draw not just for neighborhood residents who lack a grocery store, but for downtown, Cabbagetown, and southwest Atlanta residents seeking everything from lettuce to lawnmowers.
"There are also more than 200 jobs that will be available at this Walmart," Young says. "Hourly wage jobs with benefits in a market where we're at high unemployment? You can imagine our residents are very excited."
Not everyone is so optimistic. Harley Etienne, a Georgia Tech professor and Vine City homeowner who attended the frigid press conference welcoming Walmart, applauds the possibility of fresh and respectable food coming to the community. In addition to the usual questions about the impact to the local economy, he questions whether the addition of the big-box retailer will create the kind of spark the community, parts of which are wrestling with abandoned homes and underwater mortgages, needs. Making matters worse is the reality that Atlanta Public Schools might shutter the middle school serving the community as part of the redistricting process.
"Firms come and go," he says. "Retail outlets come and go. But schools are very important. Once you start closing schools, the game changes. Does a Walmart offset the loss of a middle school, a place where people come with their kids and organize their community? I don't know how a Walmart offsets the loss of that — or that the city understands that when you do those things in tandem, a Walmart is not a proxy for the school."
He adds: "It sounds good on paper, to throw something like that up, and it might even bring jobs. But we'll have to sift through the rhetoric. If the Walmart says it'll bring 500 jobs, how many are construction jobs that go away the minute they open doors? How many of the jobs have wages that people can live on? How many businesses and employees will Walmart displace if it siphons away existing business?"
On Monday morning in Vine City, more than 100 people gathered in the overgrown vacant lot between the former Publix store and the concrete foundations of never-built townhomes. Nearby, a vacant home doubles as a drug-buy drive-thru; a dog without a collar roams; and plastic bags litter the road. The people standing in the vacant lot, though, have hope in their eyes.
Standing in front of golden shovels, resting in a ceremonial patch of dirt, Walmart executives and elected officials — including Mayor Reed — welcomed the big-box retailer into the neighborhood.
"We're going to make this place a place that it should be," Reed said. "A place you can believe in. And a central force in that effort will have been Walmart's decision to make that investment when everyone else was walking away."
Officials' speeches blasted from a too-loud PA system and echoed off the boarded-up historic building which once housed the historic Paschal's Restaurant. The commentaries touched on Vine City, English Avenue, and the Atlanta University Center's past as a thriving commercial area and focused on its potential for greatness.
Speaking after the press conference, during which he announced that the construction of a controversial new stadium to host the Atlanta Falcons up the street and new transportation improvements would further boost the community, the mayor questioned others' doubts over Walmart's long-term impact.
"At some point, the community has to have an anchor in order to inspire and support small businesses," Reed told CL after the press conference. "When strong companies come into a community, it sends a signal to the broader community that this is a place where you should invest for the future."
The scene was one that inspired not just Walmart and city officials, but also some elderly residents of Vine City who hope the mayor is right. If you close your eyes, you can see the discount aisle as half-full, believing that the retailer's inevitable foray into other parts of the city — a micro-sized grocery store in downtown or Mechanicsville? — would do more good than harm.
Then you open your eyes and realize that, if the Walmart was willing to make a gamble in a community that, according to the mayor, every other grocer on the East Coast considered a no-go, what's to stop them from venturing to where help isn't necessarily needed — and money can be made?
"Right now we're more in the metro area," says Walmart's Wilkins. "As the opportunity presents itself to be in the city, we'll definitely take a look at that."