Walmart pleads its case to college

By Katy Nielsen

WalMart is working to change its image after years of news reports detailing closings of small businesses in proximity to the retail giant. On Dec. 2, Walmart’s Director of Community Affairs, Public Affairs and Government Relations Steve Restivo spoke to marketing communication students at Columbia about the challenges of maintaining a positive identity for the number one company on the Fortune 500 list.

The Ferguson Hall auditorium in the Alexandroff Campus Center, 600 S. Michigan Ave., was nearly full of Columbia students who listened to Restivo and had the opportunity to ask questions at the end of his presentation.

A Walmart will be built in Pullman Park—along with several dozen smaller Walmart stores throughout the city, and there is debate about whether it will be good for Chicago.

Some issues students asked about included the idea that Walmart causes small nearby businesses to close their doors, and that the store’s starting wage for sales associates is not a livable wage.

“What we find in the majority of communities across the country [is] … our stores are a magnet for growth and development,” Restivo said.

According to Restivo, businesses often grow out of a Walmart’s construction because of the high traffic of customers the store brings to the area.

“Are there businesses that go out of business after we open? Absolutely,” he said. “But in the majority of cases we find we actually lift up the communities from a development standpoint.”

A study published by the Loyola University Chicago and the University of Illinois at Chicago in December 2009 titled “The Impact of an Urban Wal-Mart Store on Area Businesses: An Evolution of One Chicago Neighborhood’s Experience,” followed businesses that closed when a Walmart store opened on the West Side of Chicago in September 2006.

According to the study, the probability of going out of business during the study period was significantly higher for stores close to the Walmart location. That probability decreased at a rate of 6 percent per mile in all directions from the store location. Of the 306 stores the survey followed, 82 went out of business during the study period.

“I’m not sure it’s different than Starbucks,” said John Challenger, chief executive of Chicago-based outplacement firm Challenger Gray and Christmas. “Undoubtedly there are a lot of local coffee shops that had to close down. You’d say the same thing about any big retailer.”

Best Buy, for example, caused other electronics businesses to close, Challenger said. But he said as long as these companies are not doing anything illegal, there is nothing wrong with the competition.

According to Restivo, whatever company is on top will be the one scrutinized most.

“[Walmart] give[s] people who live more on the margin access to consumer goods that would not be affordable to them at higher prices,” Challenger said.

Ralph Segall, chief investment officer of Segall Bryant and Hamill in Chicago, said Walmart helped people afford more things at lower prices.

“Walmart is the lowest cost operator wherever it goes,” Segall said. “That is largely the reason [Walmart has] avoided urban areas because urban areas unions are far stronger and largely because of restrictive work rules.”

Low employee wages were a topic addressed by Restivo at the lecture. According to him, Walmart aims to make the wages competitive across all employment positions.

“There are only a handful of folks at each store [who] make that starting wage,” Restivo said. “At our West Side store, it’s literally a handful of people [who] actually earn that starting wage.”

The starting wage for a sales associate is $8.75 an hour, a rate the city of Chicago fought for before the Pullman Walmart was approved in June 2010, according to an agreement the City Council made with the retail giant. This is 50 cents above the state minimum wage.

“If you were to leave and take your skill set elsewhere we would want to make sure that we’re doing a better job than any other place you would go to work,” Restivo said.

In addition to adding jobs, Walmart will bring produce to “food deserts,” areas without access to fresh food.

“The only reason they are coming into Chicago now is because of the downturn,” Segall said. “As bad as it is, a lot of ministers in neighborhoods on the South Side said Walmart is actually a source of jobs.”

According to Federal Poverty Statistics for 2010, the federal poverty level for a family of four in America is $22,050. The average full-time Walmart sales associate salary for 2010 is $21,000.

Restivo said the majority of their employees are making more than the starting wage and all have access to health care.

Ultimately, Restivo said Walmart is trying to change its reputation, tell its story and show how it is making things better for its consumers and its surrounding community.

According to Restivo, whatever company is on top will be the one scrutinized most.

“[Walmart] give[s] people who live more on the margin access to consumer goods that would not be affordable to them at higher prices,” Challenger said.

Ralph Segall, chief investment officer of Segall Bryant and Hamill in Chicago, said Walmart helped people afford more things at lower prices.

“Walmart is the lowest cost operator wherever it goes,” Segall said. “That is largely the reason [Walmart has] avoided urban areas because urban areas unions are far stronger and largely because of restrictive work rules.”

Low employee wages were a topic addressed by Restivo at the lecture. According to him, Walmart aims to make the wages competitive across all employment positions.

“There are only a handful of folks at each store [who] make that starting wage,” Restivo said. “At our West Side store, it’s literally a handful of people [who] actually earn that starting wage.”

The starting wage for a sales associate is $8.75 an hour, a rate the city of Chicago fought for before the Pullman Walmart was approved in June 2010, according to an agreement the City Council made with the retail giant. This is 50 cents above the state minimum wage.

“If you were to leave and take your skill set elsewhere we would want to make sure that we’re doing a better job than any other place you would go to work,” Restivo said.

In addition to adding jobs, Walmart will bring produce to “food deserts,” areas without access to fresh food.

“The only reason they are coming into Chicago now is because of the downturn,” Segall said. “As bad as it is, a lot of ministers in neighborhoods on the South Side said Walmart is actually a source of jobs.”

According to federal poverty statistics for 2010, the federal poverty level for a family of four in America is $22,050. The average full-time Walmart sales associate salary for 2010 is $21,000.

Restivo said the majority of store employees are making more than the starting wage and all have access to health care.

Ultimately, Restivo said Walmart is trying to change its reputation, tell its story and show how it is making things better for its consumers and its surrounding community.

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