Chicago suburbs are thrilled to host Wal-Mart stores and even subsidize their development with tax dollars, according to a story in today’s Chicago Sun-Times, and they have no qualms about the lack of pay or benefits for workers. The message is that Chicago will lose big if Daley doesn’t veto the big-box ordinance as promised. Maybe that’s so. But my visit to a new Target store, at 2112 W Peterson Ave, over the weekend made me wonder if Wal-Mart can afford to shun the city in the company’s endless expansion and build only around its edges.
This Target store must have parking for 1,000 cars and still I drove around for five minutes before I found a spot. The store aisles were crammed on Saturday afternoon and though the wait at checkout wasn’t long, every register seemed to have at least a couple of people in line to pay. This is an incredibly profitable store and would remain incredibly profitable even if Target was forced to pay its employees 10 bucks an hour by 2010, as the ordinance requires. The same can be said of city Targets on Addison, Elston and Roosevelt.
And there’s plenty more money to be made in Chicago. One estimate puts untapped consumer demand on the city’s south and west sides at $1.3 billion. It’s true that in some spots Wal-Mart will be able to save money by locating just outside city limits, but this is the strategy the corporation already has been pursuing for years with stores in Evergreen Park, Bedford Park, Bridgeview, Forest Park, Niles and other fringe suburbs.
Wal-Mart didn’t become interested in Chicago stores because it wanted to create jobs and spur development in the inner city, it became interested because after years of building up a strong presence around the perimiter, the corporation realized how much money could be made by crossing the city limits.
If Daley didn’t veto the ordinance and Wal-Mart did hold the line, refusing to honor us with its presence, that would create a massive opportunity for the likes of Target. Companies that presented a united front to attack the ordinance wouldn’t take long to rethink their positions if that meant boosting their market share and gaining a competitive advantage.
Another thing worth noting about the new Target on Peterson is its greatly improved design. The store is not likely to win any architecture awards, but it was built right up to the street, which it embraces in a way that other Targets don’t (and in a way that the failed Kmart and Venture stores that previously occupied this site didn’t). Rather than a massive surface parking lot that would have created acres of dead space on Peterson, most of the parking sits under the second-floor retail in a covered garage. Target planned this store as an environmentally friendly structure and hoped to have it LEED certified.
The Peterson store shows that a big box retailer can be sensitive to the urban context and build appropriately when massive profits are at stake. The success of this and other Targets in Chicago is a good argument for why the same retailers ultimately will play by rules they don’t like to get a piece of the city pie.