Walmart executives must be experiencing deja vu.
Wasn't it just 20 years ago that they were reviled around the United States as plunderers of small retailers that didn't have a chance once a Walmart targeted a particular American town? The almost 50-year-old retail giant spent most of the last decade dutifully improving its reputation with various pools of critics on those grounds and others. But now, the Mexico-bribery scandal unveiled by the New York Times has brought back those awful allusions to ruthless corporate raiders — only, this time, the ignominy has been elevated to a global scale.
Walmart shoppers in America and the world around aren't likely to care too much about the company's bribes in Mexico; future sales trends are much more likely to be dictated by Walmart's pricing, merchandising and marketing practices and, of course, whether the U.S. economy ever pulls out of its slow-growth mode. But the house that Sam Walton built, which turns 50 in July, does need to be concerned about the future of its U.S. urban expansion plans for its smaller (than a SuperCenter) "Neighborhood Market" stores in the wake of the Mexico scandal.
As America has become saturated with Walmarts in the small-town and suburban settings that have always comprised the company's comfort zone, Walmart has focused more and more on moving into big cities — where there are a lot of potential new Walmart customers, but also a lot of red tape and political opposition.
So while Walmart lately has been earning kudos for its initial forays into Chicago, for instance, and has been regarded as a potential corporate savior on the issue of wiping out "food deserts" in American inner cities, the Mexico scandal could be a big set-back, the New York Times argues.
"Overnight, the environment has shifted in terms of Walmart's strategy in big cities, in winning over local politicians," Dorian T. Warren, a Columbia University political-science professor who is studying Walmart, told the Times. Already facing opposition in the Big Apple, New York City pension funds have said that they'll vote against re-electing Walmart board members at the company's upcoming annual meeting.
Maybe so. But ultimately, decisions about urban expansion in New York, Los Angeles and elsewhere are still likely to be based on the ultimate community self-interest wherever the chain would like to set up shop. Do financially pressed communities with high unemployment and little fresh produce want the satisfaction of saying no to Walmart because it bribed Mexican officials? Or will they want the tax revenues, jobs and ripe mangoes instead?