South Florida real estate brokers say Walmart was able to find opportunities during and after the recession as land prices took a dip, particularly in South Miami-Dade County. Several of the new supercenters Walmart has on the drawing boards for the coming years are in that area, including locations in Naranja and Goulds.
“It’s all about pricing,” said Josh Rodstein, senior director of NAI Miami. “When we hit $10 or $15 per square foot on raw land it priced them out of the game. Then when it got to $20 or $25 per foot forget it. But as land prices have come down so drastically in some areas, the numbers work for them.”
Walmart won’t directly attribute its recent expansion to any change in South Florida’s real estate prices. But the company does acknowledge that some of its growth in Miami-Dade County has been about taking advantage of vacant retail spaces.
The Hialeah Neighborhood Market that opened in March is on the site of a former Circuit City while a Pembroke Pines supercenter that opened in January was a shuttered Home Depot. Both a supercenter planned for Goulds and a Neighborhood Market in Homestead scheduled to open next year were former auto dealerships.
In order to facilitate the expansion of the Doral store, Walmart purchased the shopping center. The space that Walmart expanded into was previously a Circuit City and a 99 Cent Stuff, both of which closed.
That additional property allowed the Doral store to nearly double in size from 125,000 square feet to 232,000 square feet, adding a full-size grocery store with 1,000 new items plus a cafeteria that serves hot meals and an ice cream counter. General Manager Eddie Marciniak said sales at this store have jumped close to 40 percent since the expansion opened in April.
“A lot of our customers were telling us that they had to bypass us to go down the road to get groceries,” Mariniak said. “When we added food, we saw a lot of new faces because we gave them what they wanted.”
Since the expansion Cindy Dorvilier swings by the Doral store a couple times a week for lunch and a quick shopping trip.
“They did a good job,” said Dorvilier, who works in Doral and lives in North Miami Beach. “When I don’t have lunch, it’s a convenient and cheap place.”
Given the precarious state of the U.S. economy, the most recent financial results for Wal-Mart Stores show that the retailer’s core low-income and middle-income consumers are spending, but still feeling the pinch. Wal-Mart last month said same-store sales for the quarter ending July 27 rose only 2.2 percent. Sales rose 4.5 percent to $114.3 billion, but that number was still below analysts’ expectations.
At the same time, the economy has also provided a stronger case for the economic impact Walmart can bring to a community. In 2011, Walmart provided 5,000 jobs in Miami-Dade County and paid $4.5 milion in property taxes. Those numbers were even higher in Broward County, where the company has more stores, so it employed 6,000 people and paid nearly $7.5 million in property taxes.
But even those kind of numbers aren’t enough to silence Walmart’s critics at Midtown Miami. Those same people had no problem when Target opened in Midtown.
“Target has got a better image than Walmart for better or worse,” said Dean Schwanke, senior vice president with the Urban Land Institute. “People always have a problem with infill locations. The NIMBYs [anti-growth critics] don’t want to see the neighborhood change. Walmart has got to come up with a sexy design that looks good and you don’t feel offended by.”
Walmart is trying to do a better job of making its stores fit in architecturally within the community. Gone are the days when all Walmart stores were cookie cutter, giant grey boxes with royal blue trim. While an official design for the Shops at Midtown Miami store has still not been submitted, Walmart has discussed plans that would include a distinctive Mediterranean-style architectural design, plus a parking garage above the store and street front retail stores lining the building.
Opposition is nothing new for Walmart, whose critics run the gamut from union leaders to anti-growth critics who fear that the arrival of Walmart will shut down local businesses and in turn put local employees out of work. .
Hialeah Gardens Mayor De La Cruz said he thinks that fear is unnecessary.
“I know a lot of elected officials are afraid Walmart will put a lot of people out of business,” De La Cruz said. “What I’ve seen is just the opposite. A lot of places open around Walmart and have done very well just because of the traffic they generate.”
The bottom line: no matter how many people complain about Walmart, many of them still are shopping at the world’s largest retailer. Miami residents are currently spending $85 million a year on Walmart purchases outside the city limits.
“You can moralize about it, but if people really felt that strongly then they wouldn’t shop there,” Stern said. “It’s a perception thing and Walmart is going to have to continue fighting it. When you’re the biggest, there’s going to be a bullseye on your back. Nobody likes Goliath.”