Wal-Mart eyes Chicago expansion: report

Wed Feb 11, 2009 5:39am EST

A worker brings carts back into a Walmart store in Westminster, Colorado August 14, 2008. REUTERS/Rick Wilking

A worker brings carts back into a Walmart store in Westminster, Colorado August 14, 2008.

Credit: Reuters/Rick Wilking

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(Reuters) - Wal-Mart Stores Inc is mounting a new push to expand in Chicago, hoping its promises of jobs and sales tax dollars will prove more tempting in a recession than when city leaders first rebuffed the discount chain earlier this decade, the Wall Street Journal said.

The world's largest retailer, which so far has been able to build only one store in the third-largest city in the United States, hopes to open a half-dozen more in the coming years, the paper said, citing the company and politicians familiar with the plans.

It has been heavily courting Chicago leaders and is studying a dozen potential sites, the paper added.

The company now sees the Windy City as a potential proving ground for urban development strategies it could later bring to other resistant markets, including New York and Los Angeles, the Journal said.

Wal-Mart, whose stores are largely concentrated in rural and suburban markets, has long struggled to penetrate the largest U.S. cities amid opposition from politicians sympathetic to organized labor and small business groups concerned the discounter would steal sales from smaller retailers, the Journal said.

Wal-Mart's sales at U.S. stores open at least a year have been outpacing its competitors, but the retailer has said it would keep a close eye on expenses amid the economic downturn.

Wal-Mart Stores is cutting 700-800 jobs at its Wal-Mart and Sam's Club home offices as the group looks to realign its corporate structure and reduce costs.

Wal-Mart's renewed Chicago push comes at a time when the company's domestic new-store expansion is slowing and it has begun to feel the drag of the recession, the Journal said.

Wal-Mart could not be immediately reached for comment by Reuters.

(Reporting by Bhaswati Mukhopadhyay in Bangalore)

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