What next for Walmart in Chicago?

Walmart recently (and finally) reached agreement with the City of Chicago about wage levels in the stores that it plans to open there. My point, on a recent RetailWire discussion, is that the challenges are just beginning in a big urban setting like Chicago:

It looks like the agreement on base pay was a necessary compromise on Walmart’s part. Without it, the push into urban markets like Chicago was likely to remain stalled. Now that there is apparent agreement on moving forward, it will be fascinating to watch how Walmart approaches a marketplace like Chicago with varying footprints ranging from “big box” to smaller formats focused on food and consumables.
It will also be a challenge for Walmart to find a balance between the lower margin categories likely to drive small-format stores and the higher costs (wages, logistics, shrinkage) associated with an urban market. Will Walmart be able to maintain its “price leader” position given these kinds of competing pressures on the bottom line?
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