Wal-Mart goes urban, with better wages and smaller stores

America's quintessential small-town, big box retailer, having saturated nonmetropolitan areas and suburbs, is going to the city. Here's the story from today's New York Times.

The retailing behemoth has been negotiating with the Chicago City Council over a site on the city's South side six years. Now, after apparently agreeing to pay entry level workers $.50/hour better than the minimum wage, Wal-Mart is making some progress with the local authorities. It's a reminder of how much more desperate for jobs--and how much less organized--small towns are when it comes to dealing with Wal-Mart and a prospective store. An excerpt from the Times story follows:

What would it take for urban areas to welcome Wal-Mart?

The answer seems to be a terrible job market and stores that do not look much like traditional big boxes.

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If Wal-Mart can succeed in the urban market, that could mean several hundred stores just in major cities like New York, Chicago and Detroit, bringing several hundred million dollars in additional earnings, analysts said.

In addition to paying better wages, Wal-Mart is looking at placing much smaller stores in urban markets. Indeed, the stores would be as small as 8,000 square feet, about 4% of the size of a new Supercenter.