How Walmart may have blown it in NYC
Walmart certainly makes it hard for people who want to support the giant retailer— especially those of us (ranging from the mayor to major business groups to me) who have argued that it should be allowed to do business in New York City.
A huge scandal exploded over the weekend when The New York Times wrote that Walmart may have not only systematically bribed Mexican officials to ease its expansion in that country but also covered up the activities when alerted to them. It’s a major blow to Walmart’s efforts to open the stores in New York City. The question is whether it will be fatal to their plans here. The answer is likely to be yes, and it is Walmart’s fault.
Monday Walmart insisted it remains committed to New York. It’s most important supporter remained loyal as Mayor Bloomberg told reporters, “I’ve been a big supporter of the government not telling people where they can do business. Here the market decides and people decide. I have no idea what they did in Mexico and if it’s true or not. Walmart has the right to be here. You don’t have to work there and patronize them. But it’s totally up to you.”
The mayor is right on the substance but the politics is very different. He gave Walmart’s entry a strong and public endorsement late in the 2009 mayoral campaign, and the giant retailer capitalized on that with an adroit advertising and public-relations campaign. The success of Walmart’s efforts were clear from public opinion polls that showed that New Yorkers supported the retailer’s entry by huge margins, even among those who thought it would hurt small businesses. New Yorkers understood that Walmart would benefit consumers and rejected the idea that city government should decide which retailers could operate here.
Of course, the polls didn’t persuade any of the leading Democratic candidates for mayor in 2013, all of whom vociferously oppose Walmart—maybe on principle and maybe because unions carry so much clout in the Democratic primary. It’s been obvious for a long time that Walmart needed to open stores while Mr. Bloomberg remained in office even if the company targeted a location that didn’t need City Council approval.
Yet, Walmart squandered all that momentum by not announcing a plan to open stores. It is true that giant companies like Walmart march to their own beat, but the months of silence have clearly eroded its position.
The Mexican scandal hurts in two ways. It obviously means any move in New York will need to be delayed until the publicity dies down. More importantly, the New York Times story suggests current CEO Mike Duke, the driving force behind the effort to move into New York, could be implicated.
With the clock ticking toward a new mayor, Walmart may have just blown it.
