CHICAGO: Baggy clothes and Mexican CDs line the aisles. Catfish bait and automobile decorations sit on the shelves. A local restaurant serves up fried chicken near the checkout stands.
After blanketing rural America, Wal-Mart is pushing into big cities with a new strategy: catering to local shoppers in this case, black and Hispanic customers in a West Side Chicago neighborhood while making efforts to help other local businesses survive.
There is a lot riding on Wal-Mart s success at this store that opened last September, both for the struggling neighborhood and the company.
Chicago is the biggest city Wal-Mart has entered, but only after a long battle over worker pay and benefits and concerns that it would crush local businesses the same issues that have dogged it for years and prevented it from cracking New York City and other markets.
The retail giant has long been criticized by union-backed groups, who claim the company pays poverty wages, runs small businesses out of town and pushes employees onto tax-funded public health care. Wal-Mart denies those allegations.
"Wal-Mart has to show that it is willing and committed to forming a true relationship with that (Chicago) community that goes beyond a big retailer that sells socks cheaper than anybody else," said Steven Silvers, a corporate reputation management expert with consultancy GBSM Inc.
in Denver.
Francisco Soto worries whether such a relationship will happen or whether so many customers will go to Wal-Mart that he s driven out of business.
Soto, who owns Midwest Audio, less than a block from Wal-Mart, said that during the holiday shopping season, Wal-Mart sold TV-radios for $25 ( 19) less than he paid for them.
"That s my bread and butter," Soto said. "I don t know what my future here holds."
But Wal-Mart insists it can help both businesses and residents in this community where the unemployment rate is in double digits, noting that 15,000 people applied for 400 jobs there.
To prove it wants to be a good neighbor, the store caters to local residents and says it has a plan to help other businesses.
It carries a wide selection of items such as clothing, music and foods favored by blacks and Hispanics, who account for 90 percent of the customers, manager Ed Smith said.
The aisles are wider than in many other stores because people here often shop in large family groups, said Mia Masten, a Wal-Mart spokeswoman in Chicago.
Signs for various sections of the store are in both English and Spanish.
The Uncle Remus Saucy Fried Chicken restaurant is another nod to the neighborhood, Masten said.
"We were the first store to open to have a local restaurant from the neighborhood come into our store," Masten said.
The restaurant was one of the first things Patricia Wright noticed when she walked inside the new Wal-Mart. "The fact you have an Uncle Remus here, you wouldn t find one ..
. in the suburbs," said Wright, 44, of Chicago.
The store, included in the "Wal-Mart Jobs and Opportunity Zones" initiative announced last April, bought ads in local newspapers for two hardware stores, a bakery and other small businesses, and will produce ads for the same five businesses to be broadcast over the in-store radio feed.
Last week, Wal-Mart announced the program would expand to nine more stores in other cities economically struggling areas.
"We want to work with them in partnership to revitalize their business," Smith said.
Critics say the program is simply a publicity stunt.
"The idea that a giant company is going to teach small companies to compete with it seems ridiculous," said Nu Wexler of Wal-Mart Watch, a union-backed organization.
Others, though, say the program is the kind of thing Wal-Mart needs to do.
"Wal-Mart knows there are enough people who don t go there because of its reputation," said Silvers.
Although Wal-Mart said it would hold seminars for Chicago businesses, Smith said he does not know if that has happened yet. And the store has not begun selling products by local vendors, as officials promised before the store opened; they say applications from local vendors are being analyzed.
Author Charles Fishman said Wal-Mart must be careful to deliver on its promises.
"If they don t, rather than helping the community they simply increase cynicism," said Fishman, who wrote the book, "The Wal-Mart Effect: How the World s Most Powerful Company Really Works and How It s Transforming the American Economy."
Just how the new Wal-Mart and its strategy will affect local businesses in Chicago remains to be seen.
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