Wal-Mart's U.S. expansion plans imperiled by Mexican bribery allegations; numerous cities revisiting retailer's development proposals

Cindy Allen

Cindy Allen

May 1, 2012 – Industry Intelligence

LOS ANGELES , April 30, 2012 () – The fallout from alleged bribes in Mexico has now imperiled Wal-Mart Stores Inc.’s expansion plans in the U.S., The New York Times reported April 29.

Domestic opposition to the company’s recent expansion efforts in large cities include:

        • In Los Angeles, groups opposed to Wal-Mart’s attempts to build a store in Chinatown have cited the bribery scandal in a supplement to an appeal that they filed to revoke the company’s building permit.

        • New York City Councilman Erik Dilan, the head of the housing and buildings committee, has said that the commitee will investigate a land-use transfer for a location that Wal-Mart has been eyeing in Brooklyn.

        • Opponents to Wal-Mart’s plans to build three possible stores (located in Roxbury, Somerville and Watertown) in the Boston area have demanded that Wal-Mart provide full financial disclosure for contributions made to community leaders, elected officials and local organizations.

Janney Montgomery Scott LLC analyst David Strasser said that the worst fall-out from the bribery scandal may be that “[i]t gives more power to [Wal-Mart’s] critics.”

Wal-Mart, long a subject of criticism from environmental groups, labor unions, and local community groups, has waged a concentrated effort over the past few years to improve its image via such means as positioning the company as a seller of fresh, healthy groceries; devising a plan to reduce its energy consumption; and meeting with activists in an effort to improve its health care and labor records.

In recent years, Wal-Mart, having largely exhausted its domestic expansion opportunities in rural and suburban areas, has turned to large urban areas. In an effort to smooth its expansion efforts, Wal-Mart has frequently made a series of donations to local nonprofit organizations and politicians.

Those donations are now coming under scrutiny. Professor Warren of Columbia noted that the perception that Wal-Mart is buying off politicians could potentially spread to other cities, which would make it more difficult “for politicians to accept campaign contributions from Wal-Mart.”

Wal-Mart spokesperson Steven Restivo said that the company would not alter its domestic expansion plans or its donation policies in light of the ongoing bribery investigation.

Since 2007, Wal-Mart’s foundation has given nonprofits in New York state more than US$13 million. In 2011 alone, the company gave Republican political committees in New York nearly $200,000.

The primary source of this article is The New York Times, New York, New York, on April 29, 2012.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.


About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025 795

+1 (310) 558 0008
+1 (310) 558 0080 (FAX)

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.