Thursday, February 16, 2012
Wal-Mart: Friend or Foe to DC Retail?

Janis Schiff, Partner, Holland & Knight

Henry Fonvielle, Rappaport Companies
Kathy Roberson, Combined Properties
Morgan Zegenheim, McCaffery Interest
Tony Rodgers, A&R Development

A lively panel was brought together on February 16th to discuss how mega-retailer Wal-Mart will affect the District when its six planned stores open in the city. The first two Wal-Mart locations scheduled to open will be east of the Anacostia River. Other locations in the District include H Street NE, 58th Street NE & East Capitol Street, Georgia Avenue and Fort Totten. In addition to providing groceries options to the underserved, Wal-Mart will bring jobs, tax revenue to the city and lower prices for consumers from competitors. All locations feature an urban footprint of 80-150,000 SF. Designs will be more creative, utilizing more architectural details that reflect the surrounding neighborhood.

Weak tenants will be affected by the new Wal-Marts. However, the panel did not think that was a bad development. Those tenants would be vulnerable in any situation. In the long run, it is better to reposition the retail space with stronger tenants. The panel agreed the most vulnerable retailer is the mid-level grocer such as a Shoppers Food Warehouse. It was asserted that many people still shop locally, within 3 miles of their homes. The smaller, mom-&-pop retail entities that are thriving provide excellent customer service and individual experiences that you will not find in a Wal-Mart. Those stores should continue to do well even with the addition of the Wal-Marts in our area.