I agree that they will reduce their presence. That's logical when your cost structure goes up. On the other hand, these threats to "pull out" are just grandstanding. Of course, I would make the threat if I were them too. But don't expect them to actually do it.
Dear Brilliant,
Well, "reduce their presence" is a pretty significant threat, too. The article does present Target as saying they'll pull out of Chicago altogether. I don't think that is an idle threat, but it may turn out to be an exaggeration. Perhaps as leases come due, as it comes time to upgrade/update a store, instead of renewing the lease, or upgrading/updating the store, they'll just close it. The effect of this law may very well be that the number of big box stores in Chicago will decline dramatically over time.
However, Wal-Mart doesn't make that threat. They're threat is to merely refuse to expand in the city (and to add a distribution center on the Eastern Shore in Maryland). Twenty stores that won't be built. Mayor Daley gets it. That's 8,000 jobs that WON'T be coming to Chicago, proper.
That's a very believable threat.
As well, it isn't just the direct loss of those jobs. I know of retailers who actually build their business plans around locating next to, as close as they can get to, big box stores. These folks live off of the traffic brought by the big box. I know of an ethnic grocery retailer that likes to locate as close to a Wal-Mart as they can get. The owner says, hey, my products are a little different from what you can get in the Wal-Mart, better, tastier, roughly the same price. With thousands of folks going into the Wal-Mart, if just a small number of those folks stop by my store when they come to the Wal-Mart, I'm good to go!
This retailer thus accrues advantage from all the spending, advertising, marketing, promotion, etc., that Wal-Mart spends to bring folks to their stores. In losing those 20 new Wal-Marts, Chicago will also lose some number of retailers like this who would have opened up right after, right next to each new Wal-Mart.
sitetest