Not (necessarily) in my backyard

Somerville Local First speaks out against Wal-Mart

By Martha Spizziri

In the last Scout, we took a look at what might happen if a Wal-Mart grocery store opened in Assembly Square. Recently, we spoke with Somerville Local First (21 Properzi Way), which supports locally owned and independent businesses.

Not surprisingly, the group has concerns. “In three and a half years in being active and supporting local businesses in the community, Somerville Local First has never opposed a business opening in Somerville. But we felt Wal-Mart, through their long, documented history of operation, is such a threat to a strong local economy, that we felt we needed to take a stance,” says SLF Executive Director Joe Grafton.

“Our position is not a straight ‘no Wal-Mart under any circumstances’ position,” he continues. “We are working in a coalition of many different groups around the community, and our approach is going to be to outline what’s called a ‘community benefits agreement’ — although we may call it something different — that  outlines the sort of operational circumstances where we feel we would be okay with Wal-Mart being here.”

With that in mind, we present a list of possible pros and cons of Wal-Mart moving into the neighborhood.

PRO: Consumer options for East Somerville.

“There has been a lot of talk in recent years about the need for affordable fresh food for people who live in the East Somerville/Winter Hill area of the city,” says Michael Meehan, Somerville’s director of communications. “It’s one of the reasons why we’re doing the Mystic Market.” (Mystic Market is a weekly farmer’s market at the Mystic Housing Development that sells fresh produce to low-income residents at subsidized prices.) In other words, East Somerville could already use another grocery store; this need will increase as housing units are built in Assembly Square.

CON: Unfair employment practices and lower wages.

When a Wal-Mart opens in a community, existing jobs are often replaced with lower-paying ones, according to a December 2007 study by the Center for Labor Research and Education at the University of California, Berkeley. “There’s a long documented history of Wal-Mart not treating their employees fairly, of paying low wages, of not developing a workforce or building transferrable skills in their employees,” says Grafton.

CON: Fewer businesses owned by locals.

A 2009 study of a Wal-Mart discount store in Chicago by Loyola University Chicago’s Center for Urban Research and Learning showed that nearly a quarter of the retail businesses located within four miles of a West Side Wal-Mart went out of business during the two-year study period. The closer a store was to the Wal-Mart, the more likely it would close. But again, it’s worth noting that the store in the study was a discount store, which would carry general merchandise and therefore compete with a wider range of businesses than would the Wal-Mart grocery store proposed for Somerville.

PRO: Competition yields lower prices.

A 2009 study in the Journal of Economics & Management Strategy found that prices at competing supermarkets fell by 1 to 1.2 percent when Wal-Mart opened a Supercenter. So chances are Stop & Shop (775 McGrath Hwy) might have to lower its prices, which could further benefit East Somerville grocery shoppers. (Stop & Shop spokesperson Suzi Robinson declined to say whether the chain would cut its prices to compete.) One footnote on the Journal report: The significant price cuts came from smaller-scale competitors. Cuts by larger chains – Albertson’s, Safeway and Kroger – were less than half that size.

PRO: New jobs – and job training – for residents.

The Circuit City location Wal-Mart is considering has been vacant for two years. The sooner a tenant moves in, the sooner hiring can start. Before IKEA moved in, it signed an agreement with the City to give Somerville residents — in particular, East Somerville residents — first crack at jobs. Both Mayor Joe Curtatone and Ward 1 Alderman Bill Roche told us that they hope to get a similar jobs agreement from Wal-Mart. If the city negotiates an agreement with Wal-Mart similar to the one inked by IKEA, Wal-Mart would contribute to a job-training program for Somerville residents — providing training for many different types of jobs, not just Wal-Mart jobs. Wal-Mart has indicated it’s at least open to suggestions from people who are interested in creating jobs.

CON: Overall jobs loss.

A 2006 study by economist David Neumark at the University of California, Irvine, found that for every retail job created by Wal-Mart, 1.4 retail jobs are lost, which amounts to a 2.7 percent reduction in average retail employment. Wal-Mart openings were found to result in a 1.3 percent reduction in payroll earnings. One caveat here: The study reported on openings of Wal-Mart Supercenters and discount stores, both of which are larger and carry a different range of merchandise than the proposed Neighborhood Market grocery store.  u