If Wal-Mart is to win the battle to do business in Washington D.C., it looks it will be through online sales.
Wal-Mart said it is scrapping plans to build three stores in the nation’s capital city, after the city council passed a bill late Wednesday (July 10) that would require big retailers to pay starting wages that are 50% higher than the city’s minimum wage.
The Bentonville-based retailer announced plans to expand into Washington D.C., in late 2010 planning six stores that would have brought roughly 1,800 retail jobs to the city, according to the retailer’s website.
Three of those stores are already under construction and Wednesday’s vote has led Wal-Mart to review its legal and financial options in this matter. Two of the stores are slated to open this fall.
The retailer published an op-ed article in the Washington Post on Tuesday. Wal-Mart warned in the article it would pull out of the city if the council passed the Large Retailer Accountability Act of 2013.
“From day one, we have said this legislation is arbitrary, discriminatory, and discourages investment in D.C. We have gone to great lengths to have thoughtful conversations with Council members about why LRAA will result in fewer jobs, higher prices and a smaller number of total retail options. It means most shopping dollars will stay in the suburbs, unemployment will remain in the double-digits in some neighborhoods and underserved communities will continue to have disproportionate access to affordable groceries,” Alex Barron, regional general manager for Walmart U.S., noted in the article.
The bill would require Wal-Mart and other larger retailers to pay workers no less than $12.50 per hour. The city has a minimum wage of $8.25 per hour. The rule does not apply to retailers with unionized work forces and it gives other retailers already doing business there four years to comply.
Mayor Vincent Gray could still veto the bill and Congress could be swayed to use its local control to keep the legislation from being enacted.
Bill Simon, CEO of Walmart U.S., told media recently that the retailer would not waste time and resources pursuing markets posing heightened opposition. He said there are plenty are markets that welcome Wal-Mart with open arms.