Not Their Kind of Town

Wal-Mart Stores Inc. (Bentonville, Ark.) has dropped its fight to open a store on the South Side of Chicago. The Chicago Tribune described the Wal-Mart effort as “a hard-fought battle to turn Chicago into a beachhead for urban expansion across the country . . . as big-city politics held sway over low prices.”

The Tribune reported that “Wal-Mart got the word from city officials that Mayor Richard Daley doesn't want to risk a messy showdown with unions over Wal-Mart . . . while Chicago is still in the running as a host city for the 2016 Olympics.” Chicago is a strong union town and Wal-Mart has a non-union workforce.

“That's the end of the story, at least for the next two to three years,” John Melaniphy, a Chicago-based retail real estate consultant, told the Tribune. “I think in the long run they'll end up in the city one way or another, but it's going to take them a long time.”

The Tribune said Wal-Mart’s back-up plan is to open stores just outside city limits, “banking that thousands of low-to-middle-income city dwellers will travel to collar suburbs to shop.” Among the suburbs Wal-Mart is looking at are Calumet Park, Cicero and McCook, according to people familiar with Wal-Mart's plans.

The site Wal-Mart was considering was at Chatham Market at 83rd Street and Stewart Avenue on the city’s South Side. Lowe's Cos. Inc. (Mooresville, N.C.) has already opened a 117,000-square-foot anchor in the shopping center. Archon Group LP (Irving, Texas), developer of the mall, has put a “For Sale” sign on the property.

The store would have been Wal-Mart’s second in the Chicago city limits. It opened a 142,000-square-foot discount store in the Austin neighborhood on the West Side in September 2006. However, the decision puts a crimp in the retailer’s ambitions of eventually operating as many as 20 stores in the city.