Pressure is being put on New York’s leadership to give the green light to Walmart (WMT) stores in the city.
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It follows recent comments from Zohran Mamdani, the Democratic nominee for New York mayor, about government-owned and operated grocery stores in each of the city’s five boroughs.
City Limits
Mamdani wants to spend about $300 million to open these stores as a pilot program to allow every New Yorker the chance to afford the groceries they need.
This has prompted some investors and fans of budget store Walmart to question again why the group does not have a presence in one of the biggest cities in the world.
Academics are also suggesting that a good alternative to Mamdani’s plan is to simply “let Walmart into New York.” This was the call of Richard Sexton, professor emeritus of agricultural and resource economics at the University of California, Davis, in the Wall Street Journal this week.
He said such a move would save shoppers thousands on their grocery bills.
Cut Costs
“The retail company has a presence in all 50 states and has sought for years to come to the city. But it has been rebuffed by claims that it will threaten local businesses and reduce wages,” he wrote. “No doubt Walmart is a tough competitor that seeks to cut costs relentlessly, and other stores that can’t keep up are in trouble. But that is what Mr. Mamdani needs if he wants to cut New Yorkers’ food costs.”
He added that a handful of city-owned groceries will never be able to match the efficiency and buying power of Walmart.
“Unquestionably the big winners from a neighborhood Walmart are shoppers,” he said. ”New York households spent on average $282.60 on groceries a week in 2023 or $14,695 a year. If Walmart reduced costs by 15%, that is over $2,200 in savings for the typical household.”
Walmart will certainly hope this gives New Yorkers some food for thought.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy ratings. Its highest price target is $120. WMT stock’s consensus price target is $111.33 implying a 14.94% upside.
