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NEW YORK – On a bank of the Bronx River, below the roar of the Bruckner Expressway, Walmart has finally found its place in a city that has long avoided it.
Walmart's e-commerce business, Jet.com, is hiring a 205,000-square-foot warehouse in the Bronx that will soon begin supplying MacBook and organic eggs to affluent New York buyers.
The physical presence is a victory for the country's largest retailer, who has faced the resistance of the labor groups and their political allies each time he has offered to open a shop in the five boroughs. But it's also a recognition that the company's long-standing national strategy will not work in some big cities.
With Jet's new takeover in New York, Walmart is attempting to move beyond the base of its big-box stores in rural and suburban America and compete with higher-income city dwellers. A retail empire based on low prices and no frills, Walmart uses Jet to attract millennia and young families with upscale fashionable products like Big Gay Ice Cream and Dr. Martens.
"We think we can win in New York," said Jet president Simon Belsham in an interview.
By acquiring standalone businesses, Walmart has been able to avoid the political fury it typically engenders in left-wing cities where Walmart's repudiated unions are strongly encouraged. Jet also operates in Boston, Philadelphia and Washington.
It's a more subtle approach. Walmart has agreed to buy Jet, headquartered in Hoboken, New Jersey, for $ 3.3 billion in 2016 and has kept the company's distinctive purple logo. Jet's parcels are transported by New York by Parcel, a Brooklyn delivery service acquired last year by Walmart. Packaged delivery vans do not carry any obvious mark of their parent company.
It also helps to reduce Walmart's status as a lightning rod because Amazon's working conditions are the target of the day.
Previous attempts by the retailer to enter the New York market, Queens, and then Brooklyn, ultimately ended the defeat. Activists and city leaders have turned the proposed stores into a referendum on Walmart's work practices.
In 2014, nearly half of city council members accused the Walton Family Foundation, funded by the company's founding family, of trying to seduce New Yorkers by giving toxic money to local support efforts. charter schools.
This time, many city leaders refused interview requests or did not respond to requests for comment on Jet's growth plans in New York. Some are skeptical, even if they adopt a wait-and-see attitude.
"Walmart may think they have found a new way to enter New York City by buying existing companies, but we must not deceive ourselves," Democratic controller Scott M. Stringer said in a statement. . "We intend to watch very carefully."
The liberals exert at least as much weight on New York politics as at the time Walmart attempted to open a store in Brooklyn in 2011. But since then, some activists say their concerns about the hand-held Work and the economy in general have overtaken Walmart.
Maritza Silva-Farrell, Executive Director of the Workers' Group and Align Community Group, worked to dispel Walmart's plans to open a store in Brooklyn's New York East section. With others, she argued that Walmart's low prices would put local businesses at risk and that lower wages would drive down the wages of other retailers.
Silva-Farrell is still concerned about Walmart's business model. But Amazon, she said, is becoming "a global threat," as the company increasingly dictates the global supply chain and expands its manufacturing business.
"Amazon will define how the economy works," she said. "It's a bigger problem than Walmart.
Some union activists see Walmart's use of Jet to enter the New York market as a sign of victory.
"The fact that Walmart had to acquire another company to operate in New York is a testament to our efforts to keep them out of business," said Stuart Appelbaum, president of the retail, wholesale and department store syndicate.
New York is now a testing ground for Walmart's urban e-commerce strategy, which places every step of the sale, from the mobile application to the "last mile" of delivery, under the control of the company.
Walmart also provides a decent number of local jobs. Jet employs approximately 1,300 engineers, executives and other employees at its Hoboken headquarters and plans to hire more than 100 workers at its Bronx Processing Center, a warehouse where customer orders will be prepared and shipped.
A spokeswoman said that it was too early to comment on the salary at the warehouse, since the facility is not yet operational. Parcel employs 150 part-time drivers, all earning $ 15 an hour, which will soon be the city's minimum wage. When Walmart acquired Jet, it was unclear how the big retailer would integrate the website into its broader online strategy.
Founded by e-commerce entrepreneur Marc Lore, Jet has been touted as the "Amazon killer" that could convince buyers with low prices. But Jet seemed redundant with Walmart.com, leading some in the tech world to speculate that the real motivation was to acquire Lore, who now runs Walmart's e-commerce nationwide.
About a year ago, Walmart reported that it was shifting gears and concentrating Jet's efforts on some northeastern cities, where Walmart's presence was not huge.
Belsham, who was hired to head Jet in March, said the revamped website should be less utilitarian and offer more inspiration – prompting shoppers to order supplies and, for example, Nike sneakers.
The offers are upscale, but the prices are not outrageous by New York standards. Van Leeuwen's Earl Gray ice cream pints for $ 5.99 and Gotham Greens hydroponic lettuce for $ 3.49 are less expensive than some grocery stores in the city.
Online grocery shopping is already a crowded market: Amazon's FreshDirect, Peapod, Instacart and Whole Foods offer grocery deliveries to New York. But analysts predict that Jet will have the benefit of using Walmart's purchasing power from suppliers to compete on price. Jet also offers products, such as iPhones and designer apparel, that other grocers do not offer.
For same-day deliveries, Jet charges a fee of $ 5.95. There is no charge for orders over $ 35 with no expected delivery time.
"This is a surgical strike," said Burt P. Flickinger III, managing director of strategic strategy consulting firm Strategic Resource Group. "Walmart could be one of the top ten retailers in the city in the first year."
Last week, for the Jet Relaunch, the company rented a brownstone near Washington Square Park to show off its New York offerings. One floor of the apartment featured displays of what Jet claimed to be real New Yorkers' orders, including an arrangement of Sam Edelman's high heels, avocados and toilet rolls, bathed in light violet.
"It's like being in a fair," said Scott Mushkin, retail analyst at Wolfe Research. "Walmart's strength lies in places like Missouri, Arkansas and Mississippi, where their stores are the center of commerce. I do not know what they bring to Manhattan.
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