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Walmart, so far, has no stores in the District. But Steven Restivo, the company’s national director of community affairs, knows the area well—he’s visited multiple times to open locations around the Beltway. And over the years, he’s quietly moved the retailer into position for an eventual assault on the city itself.
No other retailer requires an urban market-entry strategy, after all. In other metro areas, the behemoth’s arrival has involved protracted, acrimonious fights with labor unions, community activists, and local politicians. Past experience has taught the firm that introductions, in particular, need to be handled carefully. So last fall, as executives let D.C. councilmembers in on their plan to open four stores in the District, Restivo had taken care to make sure the story went public on Walmart’s own timetable—and according to its own script.
What Restivo hadn’t figured on, though, were the excited councilmembers who broke the news themselves.
“Big box retailer coming to Ward 7? Stay tuned!” tweeted Ward 7’s Yvette Alexander, around 11 p.m on Nov. 16.
“Walmart’s coming to D.C.,” followed Ward 6’s Tommy Wells, who let slip some details about the company’s plans to pay “average” wages at “new urban model” stores.
Restivo was on his way to Chicago as the news broke. When he saw the politicians doing his job for him, he turned right around, pushing the start button on a pre-planned marketing rollout. Two days later, a press release announced the plans, accompanied by a poll showing widespread support for Walmart. A slick new website invited residents to sign a petition in favor of “more money for the city, support for local community organizations, fresh produce, job opportunities, affordable prescription drugs and investment in local businesses.”
The ambush approach made sense: Instead of a slow reveal that would give opponents time to gain traction, Walmart had asked landlords and developers to keep quiet until their sites were locked in, making the developments seem inevitable. Walmart had already seeded the ground with years of charitable giving. Now, with four actual stores to talk about, the image campaign kicked into high gear, complete with press events touting donations bigger than many local non-profits had ever seen.
Six months later, with the four sites cruising toward approval, you might conclude that Walmart’s strategy had won the day. And you wouldn’t be wrong, exactly. But in other cities where the retailer used the same aggressive and determined campaign, like New York, Chicago, Los Angeles, and Philadelphia, opponents put up vastly bigger fights than in the District: New York City councilmembers held anti-Walmart rallies; Chicago’s construction unions won increased wages for members building the stores.
D.C.’s pols, though, treated anti-Walmart activism more like an annoying distraction than an opportunity to score populist points. Other than occasional demands that the corporation pay a “living wage”—$4 per hour above what the law requires—elected officials have mainly reassured constituents, celebrated the 1,200 jobs Walmart promises, and praised the retailer’s apparent willingness to fund priorities that the District’s strapped budget can’t cover.
The most sophisticated retail entrepreneur in the world brought its A-game to D.C. It probably didn’t need it.
November’s announcement of a plan for four Walmarts was a long time coming.
Back in 2002, the company’s real estate guy also wanted four stores in the District, including one at the old Convention Center. The city, though, was shooting for something better. “He was laser-focused on the CityCenter site downtown,” recalls Michael Stevens, then in charge of the Washington, DC Economic Partnership, which is charged with attracting business to D.C. “I advised him repeatedly that that was not going to happen.”
The next bid involved a site near the Rhode Island Avenue Metrorail station. But Walmart gave it a pass, telling then-Mayor Anthony Williams that there wasn’t enough parking, and crime was too high. After that, Walmart made noises about Poplar Point in Anacostia, and kept meeting with the city’s economic development people, but made no commitments.
In the meantime, D.C. started to prove itself as a retail market. A new Target thrived in Columbia Heights. Walmart began pondering ways to fit its typical big-box format into a city-sized shoebox. The chain’s exurban stores can top 200,000 square feet. Maybe, officials thought, 120,000 square feet—or even 80,000—was enough to achieve their economies of scale. At that size, a map of D.C. contains a whole lot more possibilities.
Today, Walmart’s four District spots have three things in common: They’re in areas where grocery and retail options are scarce. They’re privately controlled, meaning minimal regulatory hoops. And they have long trails of shredded plans behind them, making Walmart seem like a community savior.
Take the Ward 6 store, on New Jersey Avenue and H Street NW. Developer LuAnn Bennett got the rights to the parcel back in 1990. It’s been empty ever since, passed over by potential tenants like the Department of Justice and National Public Radio. Now, nearby residents say they need an affordable grocery store. “We’ve been praying for food in this neighborhood for about 40 years,” says Yvonne Williams, who chairs the board of trustees for the nearby Bible Way Church. “God has brought what was supposed to be here—a first-class, progressive thing.”
The Ward 4 store, near Georgia and Missouri avenues, was a car dealership until 2007 and served as a mayoral re-election campaign office for Adrian Fenty last year. A deal with Costco didn’t work out. Ditto plans for a mixed-use project. “We kept getting feedback like ‘we don’t think that part of Georgia Avenue is ready yet,’” says Randall Clarke, past economic development chair of the Brightwood Community Association. “It’s hard for me to wave the pitchfork about a retailer who came out of their own interest, without asking for city money or tax abatements or anything else.”
It’s the same story at the Ward 5 and Ward 7 locations. The Ward 5 store, at Bladensburg Road NE and New York Avenue, will occupy a 16-acre triangle of fenced-off lots and taxi depots where developer Jim Abdo’s ill-fated housing, retail, and park project was supposed to rise. Ward 7’s Walmart will sit near the Capitol Heights Metrorail station, on a site at East Capitol and 58th streets NE that Shoppers Food Warehouse recently spurned. In each of these cases, the chain chose spots that missed out on D.C.’s economic boom, where a done deal seems better than a vacant lot.
In fact, the willingness to accept Walmart as a catalyst for stalled developments extends all the way to the top. In the most public case of a pol trying to muscle the global giant, Mayor Vince Gray, at this year’s Las Vegas retail convention, issued Walmart an ultimatum. But he wasn’t looking for higher wages or local hiring, as he’d talked about publicly. Rather, Gray demanded Walmart commit to a fifth location at Skyland Town Center, the run-down shopping complex near his own home in Hillcrest—or he’d kibosh the other four.
It was a hollow threat, of course. But even if hadn’t been, it wasn’t exactly a case of a mayor playing hard to get. Walmart shrugged it off in a press release, and the city’s economic development team quickly backed away.
Even though they’d picked sites that left few soft spots for opponents’ grappling hooks, Walmart didn’t skimp on its first line of defense.
Superlobbyist David Wilmot had been on retainer since early 2006, collecting $290,000 over the next four years to lobby on legislation that affected Walmart’s interests (like D.C.’s 2006 living-wage bill—which passed, but only applies to government-funded jobs). For the new push, the company hired a team including attorney Claude Bailey, who handled legal matters for construction of the Walter E. Washington Convention Center, the Verizon Center, and Nationals stadium. He and consultant Brett Greene, who managed the finances for Gray’s 2006 D.C. Council chairman campaign, worked community meetings, exchanging handshakes with local officials. For on-the-ground assistance in Ward 7, Walmart brought on local Councilmember Yvette Alexander’s campaign manager, Darryl Rose, and her campaign treasurer, Derek Ford. Restivo, Bailey, Walmart senior director of government affairs Bill Thorne, and Terry Lee from public relations firm Walker Marchant all showed up for meetings with councilmembers.
Even though Walmart’s people weren’t asking for tax abatements or zoning changes, it was important to stay in the council’s good graces. Elected officials could still make life difficult by fanning local opposition in ways that spooked developers—or by really pushing for legislation that would place restrictions on bigger retailers. (At-Large Councilmember Phil Mendelson did introduce a bill requiring big boxes to pay living wages, but it hasn’t gone anywhere.)
In the old days of development, hiring the best lobbyists in town might be enough to pave a company’s way. But given its controversial profile, Walmart also knew that it would have to wage a more public campaign addressing what Restivo calls “reputational issues.”
“We had to correct some misinformation that had gained some traction here, for better or for worse,” he says. “I think not having a store here, and not having people be able to shop the brand, led to a lot of misperceptions about who we are.”
In the middle of last year, Walmart held a couple of focus groups at THEARC in Congress Heights, paying selected residents $100 and a boxed dinner to participate. According to Ward 8 community activist Phil Pannell, who was asked to take part, the subject was “economic development.” But all the questions had to do with Walmart. Soon afterward, the company commissioned a poll of 800 District residents, finding 73 percent in favor of “one or more” Walmarts in the District (a Quinnipiac poll found the favorability rating at 57 percent in New York City). Those results, in turn, were printed on mailers that went out across the city, and given as talking points to T-shirted canvassers who are still out touting the benefits of fresh produce and cheap generic drugs.
Walmart also worked the established media. The firm’s national head of government affairs, Leslie Dach, met The Washington Post’s editorial board; a glowing editorial followed. Walmart bought ads everywhere from National Public Radio to The Washington Informer. Favorable clips from places like the extremist website NetRightDaily and Fox News were collected on the company’s D.C.-specific website, which also contains rebuttals to anti-Walmart research, videos of D.C. residents excited about Walmart’s arrival, and specifics touting the virtues of every different District location.
The masterstrokes were subtler: Long-planned branding opportunities that just happened to reach fruition when the company needed to buff its image. In 2008, Walmart underwrote a traveling exhibit on the African-American experience, organized by NPR host Tavis Smiley. It happened to arrive in D.C. this spring. At a black-tie opening reception at the National Geographic Museum, Smiley sang Walmart’s praises to the leading figures in D.C.’s black community. Gray was on hand, posing for snapshots with top corporate execs.
By then, the Walmart logo was everywhere. Walmart sponsored the warm-and-fuzzy “Choosing to Participate” multimedia exhibit at the Historical Society of Washington, D.C. On top of $200,000 doled out over the last five years, it pledged $50,000 to the Greater Washington Urban League, whose March gala featured Walmart regional general manager Alex Barron as honorary chair. A $400,000 gift to D.C. Hunger Solutions for fresh school breakfasts led to them pictures of tykes at a Trinidad charter school munching on grapes and bagels. In the biggest coup of all, first lady Michelle Obama appeared on a Walmart-logoed stage to kick off an effort to make their house brands healthier.
The Obama appearance put avowed Walmart opponent Andy Shallal, owner of Busboys and Poets, over the edge. “Wal-Mart using #ShockDoctrine to enter DC market,” he tweeted. “Their PR machine is amazing – Michelle Obama!? What next Jesus!?”
Around the same time Walmart was cozying up to the first lady, Restivo was also spinning less powerful people. Like me. He’d first asked me to coffee during an early-spring visit to D.C. In late May, he offered me a tour of Walmart’s Alexandria store that opened eight months ago in a former Kmart. After that, he’d occasionally send emails on issues as they arose, or just direct my attention to the small number of “likes” on the union-backed anti-Walmart coalition’s Facebook page.
You can learn a lot about the company on a tour with a Walmart flack. It’s about how the store is set up: “Action Alley,” for example, is the wide aisle that has piles of stuff in the middle, so you can grab it as you walk. It’s how the store is stocked: This location has a larger ethnic food section aimed at Hispanic and Asian populations, but managers figure that wealthier Alexandria residents also shop here, as evidenced by the high demand for ground turkey, which is more expensive than ground beef.
Mostly, though, you learn that today’s Walmart is actually very much like other grocery stores—just cheaper. “I won’t say check out the prices and be self-promotional…” Restivo said, as we began. “But check out the prices.” (Apparently this works: The journalist after me was conservative Washington Examiner columnist David Freddoso, who turned around a column the next day praising Walmart’s “bounty.”)
Maybe the bargains come on the backs of non-union workers and a crushing global supply chain. But when it comes down to it, the firm knows that plenty of shoppers are able to avoid focusing on that bigger picture. Walking into a town like you own it is a lot easier when you have the absolute confidence that market forces are on your side. Despite requiring more front-end effort than the Alexandria store, each of the four District sites stand to make much more money more quickly than a suburban location.
No wonder Walmart wants in to D.C.: With sites on commuter thoroughfares, the chain can expect both to make money from local residents, and from suburbanites heading home. Right now, the commuting works the other way. In two of the community centers that hosted meetings about Walmarts, locals have long organized bus trips for residents to go to suburban locations of the store to stock up on bargain toilet paper. And in the Alexandria store, Restivo pointed out the other end of that phenomenon. Near the end of the tour, he told me to go check out all the D.C. license plates in the parking lot.
The rap on Walmart has long been its downsides for poor people: low wages, unattainable benefits, disrespect from managers, forced overtime, intimidation of attempts to unionize. In D.C., the company made a concerted effort to win over folks who might have the greatest problem with that—and turned a few into its most effective advocates.
Late last year, Lori Kaplan, executive director of the Latin American Youth Center, was invited to the Walmart Foundation’s downtown offices, where executives asked her to submit a grant application for her organization. She got it: $125,000 for youth summer enrichment, a lifeline at a time when the District’s Summer Youth Employment Program had been slashed dramatically.
At a February meeting at the Columbia Heights accounting firm Ayala & Associates, Kaplan and a dozen representatives from other Latino groups met Walmart officials including Tony Waller, the company’s Puerto Rican senior director for corporate affairs and constituent relations. “I appreciate that they are willing to reach out to youth groups and the Latino community and sort of share their story, because since they never really were in Washington, my sense was stuff the press had said over the years,” Kaplan says. “From the Youth Center’s point of view, Walmart coming to Washington is a good thing. We would really like to develop a deeper partnership where we can be a source of employees, but also a place where employees won’t just stay in the in the lowest-level retail position, but get the training to move up.”
In early November last year, several D.C. leaders were invited out to Walmart’s headquarters in Bentonville, Ark.—a couple hundred people all told, including delegates from the National Council of La Raza and other identity-based groups. It wasn’t a high-budget trip. They stayed at a Hampton Inn and were fed boxed sandwiches and a buffet of barbecue and hush puppies. But Frankie Blackburn, a longtime community organizer with IMPACT Silver Spring, was won over.
“I really did see a genuine commitment to changing the way they approach retail in a way that’s responsive to these communities that are changing,” she says. Blackburn was even excited by the possibility of having a new gathering point for the lower-income people she serves. “It’s almost like a mini community center,” she says. “Maybe they greet you and say ‘hey, would you like to know more about what’s going on in the Shepherd Park neighborhood? Or maybe they host elementary school singing groups every Friday night, in the lobby of the Walmart. When you link it to retail, people are more likely to come out and see their neighbors singing and pick up toilet paper at the same time.”
In the end, Walmart’s charm offensive even made a convert out of Manny Hidalgo, director of the Latino Economic Development Corporation, which has long recieved support from Walmart-owned Sam’s Club. Hidalgo co-founded the District-wide business association Think Local First with Shallal, but the two no longer speak. The restaurateur’s anti-Walmart events and letters to the editor have made him perhaps the most prominent critic of the firm’s arrival, along with Yes! Organic Market owner Gary Cha, which irks Hidalgo.
“I find that self-righteous approach to it shameful. That, to me, is a clear indication that you don’t know the plight of hardworking poor people,” Hidalgo says. “Is Andy Shallal going to bring a couple thousand jobs to the District? No. He lives in a beautiful home in Adams Morgan. Please get off the soapbox, come back to reality, and realize that this is a complex issue, and we owe it to the people of Washington to look at this.”
Shallal rejects that interpretation.
“There’s this idea that we’re pitting people with means against people who don’t have means, that these upper-middle-class people are dictating what lower income people can buy,” Shallal says. “That’s really a bunch of baloney. It’s not about whether you’re poor or rich. Most people who can afford to shop at Walmart can afford to shop elsewhere. It’s really a choice.”
Hidalgo says an urban Walmart won’t have the same baleful local impact as the rural version. “To continue to think of Walmart as the Walmart of before is a lost opportunity,” he says. “You have to think about what Walmart can be…If all you do is oppose, oppose, oppose, what we call it in Spanish, you’re viviendo del cuento—living off the story.”
It’s easy to explain the support as a case of a firm buying loyalty with lavish spending. But Walmart’s approach is more subtle: It’s about character as much as cash. Rather than a cushy corporate junket, Hidalgo says the humble nature of his trip to Bentonville was what impressed him. “I realized, we’re not talking about a monster, like everybody says. We’re talking about America,” he says, remembering the CEO jumping into taste-off for salmon sauces made by different wholesalers. “It’s really a down-home corporation.”
Walmart has spent many years and millions of dollars trying to sweeten its image among future collaborators and customers. As it turned out, even those who stand to lose from Walmart’s presence didn’t put up much of a fight.
Take organized labor, which in other markets led the resistance. In the District, where private-sector unions have little muscle, organized labor accepted the premise that in a weak economy, nobody could stop Walmart from coming, no matter how hard they tried. When the United Food and Commercial Workers union commissioned a poll last summer, it didn’t ask, “are you in favor of Walmart?” It asked, “Would you support legislation to require big box stores to pay more than $12 an hour and hire from the surrounding community?” Some 76 percent of likely voters say yes, but the question itself was essentially an admission of defeat. Building trades unions joined the UFCW “Respect DC” coalition, which has proposed an 11-page city-wide community-benefits agreement. But they’re more concerned about getting union members jobs on those construction sites than getting living wages for those who’ll work within them.
Another weak link in the Walmart resistance: small businesses. Despite Shallal’s fiery activism, most of the sites are essentially commercial deserts. The only location with a real existing base of small businesses is the one on Georgia Avenue, but few have rallied to defend its junk shops and liquor stores. Especially when the firm has worked with nearby business groups to apply for federal grants—something the Beacon Brightwood Business Alliance needs a lot more than it needs living-wage regs. “They really just speak to regulating Walmart,” director Hasim Dawkins says, of Respect DC’s demands. “They really don’t talk about what we can do to revitalize a commercial district.”
Churches haven’t acted in concert either. A meeting with Waller didn’t win over the Wednesday Group, a fellowship of 30-odd social justice-oriented reverends and pastors. But other big blocs, like the Downtown Cluster of Congregations and the Washington Interfaith Network, didn’t even add their names to the list of organizations in support, saying they were preoccupied with other campaigns.
All that left a scattered opposition of ideologues—whose “Walmart-Free D.C.” campaign didn’t do its side any favors by showing up to grandstand and distribute hyperbolic literature at every meeting—and people concerned about things like traffic and drainage, which have nothing to do with who’s on the lease. That’s not a coalition that was going to tax all of Bentonville’s fabled political power.
Without any prospect of actually blocking Walmart, the only thing opponents have left is asking for concessions. And there, Walmart has done a great job of dangling the possibility of cooperation with various groups, while committing to none. At community meetings, Walmart liaison Keith Morris dances around questions about whether the chain will sign a document, saying that any package of benefits would need to be tailored to each neighborhood.
Two of the neighborhoods already have community benefits agreements requiring the developers to kick back some money, both resulting from zoning processes unique to those sites. But neither of those agreements asks anything of Walmart itself. For concessions like a higher starting wage and local hiring, the Gray administration has drafted its own community-benefits agreement, but kept it under wraps. Walmart, after all, doesn’t have to sign anything.
And at every turn, Walmart has made the case that it in itself is a community benefit. Top politicians certainly seem glad to help spread that message. Just as Respect DC was staging a rally, Gray—who was elected last year with overwhelming labor support—announced that Walmart had donated $665,000 for the city’s summer youth programming. It’s hard to demand more from someone while you’re busy thanking them for their generosity.
Even politicians on the council’s left wing see little to dislike about the massive company, despite its small-business-stifling, workers-rights-trampling reputation.
“The life has already been sucked out of downtown,” says Wells. “We’re trying to build it back. And America is used to shopping at discount retailers and we have a tremendous amount of leakage. So when we say ‘what are the community benefits before we allow you in here,’ it’s under that paradigm.” The Walmart in Wells’ ward contains 300 units of workforce housing and retail bays for small businesses fronting the street; he’s also working with the chain to fund a training program at the University of the District of Columbia.
Looked at one way, Walmart’s cakewalk is an illustration of D.C.’s southern nature: Trusting of big business, grateful for investment, deeply skeptical of unions. Ward 5 Councilmember Harry Thomas Jr., often a big labor backer, has been Walmart’s biggest cheerleader. And in Ward 4, Councilmember Muriel Bowser doesn’t think organized labor should get any special deference. “Dues-paying members are concerned that Walmart will drive down wages, and they won’t be able to negotiate for as much,” she says. “So that’s as self-interested an argument as any.” It may be true. But setting up consumers and workers as two different interests is classic anti-union boilerplate, and not the sort of argument Walmart’s cadres usually hear in northern cities.
Looked at in another way, however, it’s just more evidence of D.C.’s division along the lines of race and class. Tracy Sefl, a Democratic strategist who helped found Walmart Watch, notes that the people most disposed to think about Walmart’s global labor practices are less inclined to get involved at the city level. “The sort of cognoscenti that would have been and is engaged in this Walmart opposition intellectually as liberal activists hasn’t translated here in the same way, because Walmart hasn’t said we’re going to put the stores in Spring Valley,” Sefl says, referring to the rich, leafy Ward 3 neighborhood. “Walmart would say, this was purely economics, and they’re siting their stores where it makes sense to be. It still means they bypass that often white opposition.”
Over coffee at a café off U Street NW—not Busboys and Poets, which a P.R. rep laughingly declined—Restivo offered a made-in-Bentonville take, born of triumphs in much tougher environments than the District’s. With dead-serious eyes, he predicted the future as if some higher being had clued him in.
“When each of these stores opens in the District, there will be tens of thousands of customers who come in and out every day,” he said. “Those are folks who probably never wrote a letter to the editor, never showed up at an ANC meeting, never went and voiced their opinion to their councilmember, yet they’re going to vote for every day with their pocketbook. And that’s a fact that our critics just can’t dispute. And so as a result, they try to leverage lots of noise and misinformation, and that’s taken to be opposition. But in reality, when those stores open, they will be extremely busy, and customers will be saving lots and lots of money.”