As an experienced Amazon seller, readers often ask me why a retail giant like Walmart has failed to open any locations in a massive market like New York City.
With over 8 million potential customers, New York seems like an obvious place for Walmart to expand. Yet in 2023, there are still zero Walmart stores within New York City‘s five boroughs.
In this comprehensive guide, I‘ll analyze why Walmart remains absent from NYC from an ecommerce seller‘s perspective. I‘ll also look at how other retailers are serving New Yorkers and what this means for your Amazon business.
Let‘s dive in!
Overview: The Retail Landscape of New York City
New York City is home to a highly competitive retail environment with thousands of stores spread across its dense neighborhoods.
Unlike many suburban and rural areas where Walmart dominates, New York already has a number established retail chains serving its residents:
- Grocery – Key players include Associated (Foodtown), Western Beef, Trader Joes, Fairway, Aldi
- Pharmacies – Duane Reade, CVS, Rite Aid
- Department Stores – Macy‘s, Bloomingdales, Century 21
- Discount Retail – Target, Kmart, Costco
In addition, New York City has over 10,000 bodegas, delis, independent pharmacies, and specialty food stores.
This gives New Yorkers tremendous brick-and-mortar shopping options outside of ecommerce. Now let‘s analyze why Walmart struggles to compete in this crowded market.
4 Core Reasons Walmart Has 0 Stores in NYC
There are four key factors that explain Walmart‘s continued absence from New York City:
1. Sky-High Real Estate Costs
Walmart‘s typical single-floor superstore format averages around 180,000 square feet.
In comparison, a typical full-size grocery store is only 40,000 square feet.
As an Amazon seller, you know how important sales volume and margins are. To achieve Walmart‘s desired economies of scale, securing real estate for a store this large in New York City is tremendously expensive:
Average asking rents for retail spaces in Manhattan are $344 per square foot. For a 180,000 square foot store, that equals over $60 million per year in rent alone.
Purchasing suitable real estate would easily cost over $100 million.
These figures make large-format stores very difficult for Walmart to rationalize in New York based on their expected sales and margins.
|Average Manhattan Retail Rent Per Square Foot||$344|
|Typical Walmart Store Size||180,000 square feet|
|Estimated Annual Rent For 1 NYC Walmart||$60+ million|
|Estimated Cost To Buy Land for 1 NYC Walmart||$100+ million|
As an Amazon seller, think about how these real estate costs impact Walmart‘s bottom line and push them to build stores in cheaper suburbs rather than urban cores.
2. Lack of Suitable Physical Spaces
Walmart stores are designed as single-floor rectangular buildings built around massive surface parking lots. This format does not fit well on New York City‘s dense street grid dominated by tall, narrow buildings.
There are very few sufficiently large open spaces of land in NYC that could accommodate Walmart‘s sprawling stores along with huge parking lots.
Constructing multi-level or underground stores is also not something Walmart has typically done. It would undermine their distribution efficiencies to stray far from their proven superstore template.
3. Fierce Competition From Established Retail Chains
As mentioned earlier, New York City already has a plethora of grocery, pharmacy, and discount retail options serving local shoppers.
Top competitors like Target, Costco, Trader Joe‘s, CVS, and Duane Reade have all tailored their smaller store formats, merchandise mix, and pricing for the New York market.
Walmart would have to displace these entrenched retailers to gain market share in NYC. This is a much tougher proposition than expanding into more virgin suburban territories.
4. Public Opposition From Local Communities
Over the past 20 years, multiple attempts by Walmart to open stores in New York City have been met by fierce public opposition:
- Small business owners have protested, fearing Walmart would destroy local jobs.
- Labor unions have pushed back against Walmart‘s anti-union policies.
- Politicians have listened to their vocal constituents and blocked Walmart‘s expansion plans.
New Yorkers associate Walmart with underpaying workers and undercutting labor standards. These negative perceptions have created ongoing political barriers.
As recently as 2019, Walmart was forced to abandon plans for a large Bronx store due to backlash. They‘ve only managed to open a small grocery pickup location to date.
Gaining community support to facilitate rapid NYC expansion will be very challenging given Walmart‘s reputation.
How Is Walmart Reaching New York Consumers Without Physical Stores?
While Walmart does not currently operate any full-size stores within New York City limits, they have found ways to get their products to local customers:
Walmart Delivery Unlimited – For $98 per year, NYC residents can get unlimited free grocery delivery from Walmart.com. Orders arrive in 1-2 days. I use this service myself living in Brooklyn!
Jet.com – Walmart owns Jet.com, which offers similar delivery services and targets urban millennial shoppers.
Vudu – Walmart‘s on-demand video site Vudu allows New Yorkers to access and rent/buy movies and TV shows through their digital platform.
As an ecommerce seller, these are great examples of how online delivery and digital platforms can help retailers like Walmart penetrate tough physical markets.
Omnichannel models blending brick-and-mortar, delivery, and digital capabilities are becoming critical to win today‘s consumers.
Can Walmart Ever Open Physical Stores in New York City?
As a veteran Amazon seller, I don‘t foresee Walmart opening dozens of stores across New York City anytime soon.
However, I could envision some potential scenarios where Walmart secures a small retail foothold:
Acquire local store chains – Walmart may look to buy smaller NYC chains like Duane Reade or Fairway Market to acquire existing store networks. Rebranding acquired stores as Walmarts may face less resistance.
Experiment with smaller formats – Walmart is testing Express stores of just 20,000 – 30,000 square feet that could work in urban settings like New York.
Leverage new developments – Retail spaces in new office towers like Hudson Yards provide anchor opportunities for Walmart to gain NYC traction.
I would not bet against Walmart‘s determination to eventually crack the New York market in some capacity given the huge revenue potential.
But make no mistake – between the high real estate costs, lack of suitable spaces, fierce competition, and public opposition, NYC expansion remains an uphill climb even for the world‘s largest retailer.
Key Takeaways for Amazon Sellers
As Amazon sellers, there are some key lessons we can learn from analyzing Walmart‘s failure to expand into New York City so far:
Having the dominant market position doesn‘t guarantee future success, especially expanding into new geographical territories.
Adapting your business model to fit the local environment is crucial. Walmart‘s rural superstore template didn‘t align with urban NYC.
You can‘t underestimate entrenched competitors who have already optimized their offerings for a local market.
Listening to and partnering with local communities you want to enter is vitally important.
Omnichannel models blending physical, delivery, and digital presence gives retailers the most flexibility to reach diverse customers.
Walmart‘s absence from the Big Apple reinforces these core strategic principles for ecommerce sellers targeting tough new markets.
I hope this comprehensive overview analyzing Walmart in New York City from an Amazon seller‘s perspective was helpful. Please let me know if you have any other questions!