Monday, April 17, 2006

Leaky Analysis on Wal-Mart as Neighborhood Store

In today's NY Sun the paper reports on another Wal-Mart commissioned study that "proves"-well, just what the company sought to prove-that city shoppers want the retail giant, not only in the city, but actually in their neighborhoods. We now have another slightly ironic example of the old adage, "You get what you pay for."

It seems that the company survey found that 60% of city residents want the Walmonster while 62% "support a Wal-Mart store in their neighborhood." That is what we would call counter-intuitive to the extreme; more people supporting the store in their own neighborhood than those who just responded generally with a support of the retailer. Obviously this is not decent polling by any means and shows a dramatic increase from the numbers elicited in the February Quinnipiac poll that showed a 51%-47% split over the store's desirability.

This is all contradictory of course to the Alliance's twenty five years of experience with shopping centers and box stores in this city. The Wal-Mart survey fails the test of experience (and a saliva test as well). Ask the community leaders in Tottenville, for instance, who recently made their own feelings about a Walmonster in their neighborhood quite clear.

The same could be said of the folks in Fresh Meadows and Mill Basin who turned down proposals for new large supermarkets because of the fear of disruption to the neighborhood quality of life. The same phenomenon was exhibited over the past two decades in Astoria, Bay Ridge, Laurelton, Chelsea and Canarsie. It is precisely the reason that Mayor Guiliani's megastore proposal was overwhelmingly defeated in 1996.

The other aspect of the Wal-Mart survey that is as faulty as it is irrelevant is the focus on "leakage." This focus, the argument that the city is losing millions of dollars to suburban retailers, money that could be captured if these retailers would be allowed to proliferate in the city, always fails to adequately analyze two key points: 1) why are people leaving? and 2) Would more box stores in the city prevent the efflux?

We've dealt with these issues before and made the point that in the end the proliferation of box stores would not stop the leakage and would only further cannibalize the neighborhood retail base in this city. So, as the Alliance's Richard Lipsky told the Sun building a slew of Walmonsters will not be economically beneficial and , "Leakage will continue on a massive scale for a whole host of reasons..."