WASHINGTON and VANCOUVER -- Wal-Mart's customer-sucking suburban superstores have long been blamed for wrecking small towns.

But suddenly the company has run smack into a new and more formidable foe: Big City North America.

Facing a storm of protest from a powerful coalition of small-business owners and labour groups, a real estate developer this week walked away from a plan to give Wal-Mart its first toehold in New York City. It marked the latest in a series of humiliating defeats for the world's largest retailer in its conquest of the last holdout corner of the North American retail landscape.

Executives of Bentonville, Ark.-based Wal-Mart Stores Inc. now openly admit they went about their urban invasion all wrong, particularly in California, where people in several communities voted to keep it out in a referendum the retailer sought.

"I think we came across as a bully who would get their way regardless," Wal-Mart chief executive officer Lee Scott told The Washington Post earlier this month. "Our size causes us, when we do something inappropriate, which is usually done out of stupidity, to come across as being done out of arrogance. And people just won't stand arrogance."

So now the company is showing a new kinder, gentler face to woo urban shoppers and decision makers -- part of a massive image-boosting campaign launched in January.

At a public meeting Wednesday night in Vancouver, Wal-Mart executives showed off plans for what they hope will be their first store in the city. The U.S. retail giant is seeking the green light for a 128,000-square-foot energy-efficient store, featuring wind turbines, geothermal heating and climate-controlled skylights. Outside, Wal-Mart is promising to mitigate noise by laying down sound-absorbing asphalt, and a grove of 180 dogwood trees.

"They have to get into major population centres like Vancouver, New York and Dallas because they are already well served in outlying areas," said Ulysses Yannas, a retail analyst at Buckman Buckman & Reid in New York.

In Washington, D.C., Wal-Mart has hired a former top aide to Mayor Anthony Williams to help it win approval for its first store there. Instead of bypassing city hall, the company is wooing insiders.

And Wal-Mart isn't giving up on California either. At a town hall-style public meeting in Los Angeles this week, Wal-Mart's Mr. Scott faced off against his critics and offered up the lure of lower grocery prices for shoppers if they let the company in. Californians, he said, shouldn't have to pay 20 to 40 per cent more than other Americans at the supermarket.

While Wal-Mart now rules suburbia and small towns across Canada and the United States, many cities remain a black hole.

"They've saturated that market and the next virgin territory is Urban America," explained Nelson Lichtenstein, a labour historian at the University of California in Santa Barbara and author of the soon-to-be-released book, Wal-Mart: Template for 21st Century Capitalism.

But Mr. Lichtenstein pointed out that in tackling urban areas, Wal-Mart is moving a long way from its roots near the Interstate off-ramps of the rural, staunchly anti-union and deeply religious South.

"Wal-Mart doesn't work if you can't drive a truck to it," he said.

Just a handful of its 4,170 stores are in urban locations. Wal-Mart, for example, has 30 stores in British Columbia, but none in Vancouver, nearly two years after its first bid to build there failed. Of the 131 stores listed on the firm's website in Ontario and Quebec, just 12 are located in Toronto and Montreal.

"One thing Wal-Mart has learned across North America is that if you lose one year, you just come back a couple of years later and do it again," said Vancouver City Councillor Anne Roberts.

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Wal-Mart's Downtown Blues

NEW YORK: Wal-Mart Stores Inc. is better known for its expansion battles with merchants in small towns, but lately the battleground has shifted to city centres, where many analysts feel the company's best hopes for growth lie. Yesterday, a real estate developer scrapped plans to build New York's first Wal-Mart. Opposition was led by small business owners such as shoe-store operator Lenny Karp (above) and by labour leaders who cited the firm's decision to close a store in Quebec as evidence of an anti-union bias.

VANCOUVER: Using green tactics on the next battle front

Wal-Mart is fighting criticism of the environmental impact of its proposed first big-box downtown store by pitching an environmentally advanced building with the following features:

Climate-controlling skylights

Ground source heating and cooling (geothermal)

Accessibility to public transit including existing and future transit facilities

A reflective roof membrane to reduce overheating

Storm-water management by retaining and redirecting storm water into the ground while naturally filtering it

Power-generating wind turbines to provide power to mechanical systems, including geothermal heating and cooling systems