Citing recent disappointment in the financial performances of its three Washington, D.C. stores, Walmart abruptly cancelled the planned construction of two stores in some of D.C.’s poorer areas Jan. 15.
As part of its deal to enter the D.C. market three years ago, Walmart promised to build two supercenters in Ward 7. The D.C. Council, backed by labor unions, initially resisted Walmart’s integration into the city, citing concerns with the corporation’s low wages and prohibition of worker unions.
However, the major retailer promised to open two stores east of the Anacostia River in underresourced neighborhoods, where jobs and affordable goods are much needed. The now cancelled stores were planned for Skyland Center in Southeast D.C. and in Capitol Gateway Marketplace in Northeast D.C.
The Skyland location alone would have brought $65 million in sales and property taxes to the city while adding 300 permanent and 300 temporary jobs, a major boost to the area. D.C. officials have not specified a next step for the locations, which have been zoned to accommodate a large retailer.
D.C.’s elected officials reacted with outrage at Walmart’s announcement. At a press conference discussing the issue, Mayor Muriel Bowser expressed her disappointment with Walmart and affirmed the District’s commitment to continue to try to help areas that the corporation had planned to build stores in.
“I’m blood mad about it,” Bowser said at the press conference. “We will turn our attention to those private developments to see any and everything the city can do to make sure they continue to be viable.”
A spokesperson for the mayor did not respond to requests for comment.
Due to poor financial performances at some of its locations, Walmart recently announced its decision to close 154 stores across the country and 269 worldwide, most of which are part of its Walmart Express brand of convenience store-sized centers. D.C.’s three current Walmart stores, located on H Street, Georgia Avenue and Riggs Road, will not be affected. Walmart’s first two locations in the District opened in 2013.
The company’s stock prices have gone down nearly $25 a share from January of last year, and Walmart is looking into how it can revitalize its company’s profits, which forced them to draw back from building the two new D.C. superstores.
In a press release, Walmart explained that the decision to pull out of Skyland and Capitol Gateway was part of a greater trend in Walmart’s business model.
“As part of a broad, strategic review of our existing portfolio and pipeline, we made the difficult decision to close 154 stores throughout the U.S.,” the statement said. “As part of this review, we’ve concluded opening two additional stores in the District is not viable.”
The statement also cited concerns about the three current Walmart stores in D.C., which have not been profitable for the company.
“We share in the disappointment about this reality but our existing three stores are not profitable,” the statement said. “We must focus on improving them so we can take care of our customers and associates.”
D.C. Councilmember Yvette Alexander (D-Ward 7) expressed frustration at Walmart’s decision and pointed to possible discrimination in a statement to CNN. Ward 7 has a median income of $35,000, which is nearly $17,000 less than the national median average income.
“I take this personally, as I advocated to bring them to Ward 7,” Alexander said. “This has racial and social-economic discrimination implications.”
Former D.C. Mayor Vincent Gray, who negotiated the deal with Walmart during his term, criticized Bowser’s inability to keep pressure on Walmart to stay in D.C. Gray stressed the need for the company to be held accountable for backing out. Gray could potentially use the issue as part of an attempt to launch a political comeback in a possible Councilmember run this year against Alexander in Ward 7.
“If I were mayor, I’d get on a plane and go to Bentonville [Walmart’s Arkansas headquarters]. They should be held accountable,” Gray said to The Washington Post, citing Walmart’s Arkansas headquarters. “What did the administration do to stay on top of this? There is no bigger project going on than this one.”
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