CHICAGO – Wal-Mart Stores Inc. (WMT), under fire from a host of critics for its business practices, Tuesday said it would open more than 50 stores in distressed areas and help small business around those locations thrive once the discount chain moves in.
The world's biggest retailer, often blamed for driving mom-and-pop stores out of business, said it would offer business development grants to nearby companies and give them free in-store advertising as part of a new economic development program.
Wal-Mart will also hold seminars for minority and women-owned business owners on how to become Wal-Mart suppliers, as well as seminars for all surrounding small businesses on how to compete in a community with a Wal-Mart.
Wal-Mart said Chief Executive Officer Lee Scott will detail the plans at a press conference Tuesday on Chicago's West Side, where the retailer is opening its first store in the nation's third-largest city.
The company faces fierce opposition from labor groups, environmentalists and others who contend that it devours green space, drives competitors out of business and pays poverty-level wages.
The mounting criticism has slowed Wal-Mart's expansion efforts, particularly in urban areas such as Chicago.
The retailer has tried to mollify critics through programs such as a lower-priced health care option, and it recently promised to reduce the waiting time for part-time employees to qualify for health insurance.
As part of the economic development program, Wal-Mart plans to establish 10 "jobs and opportunity zones."
"The zones will encompass the Wal-Mart store and a host of local businesses and suppliers with which Wal-Mart will work to increase job creation and economic opportunity in surrounding neighborhoods," Wal-Mart said in a statement.
Wal-Mart said it will open more than 50 stores over the next two years in neighborhoods with high unemployment, on sites that are environmentally contaminated, or in vacant buildings or malls in need of revitalization.
The first such zone will be around the new Chicago store. Wal-Mart struggled to win support for that store, and local politicians rejected plans for a second location on the city's South Side. The retailer also faces fierce opposition in other major cities such as Los Angeles and New York.
Wal-Mart has stepped up public relations efforts in the past year as two union-backed groups -- Wake Up Wal-Mart and Wal-Mart Watch -- launched grassroots campaigns to draw attention to Wal-Mart's employee benefits, treatment of suppliers, and other issues.
A study by researchers at the Public Policy Institute of California found that Wal-Mart stores reduced retail sector employment by as much as 4 percent because smaller stores closed when Wal-Mart arrived.