The Wal-Mart Factor: Effects of the megastore

The town of nearly 6,000 has had a regular Wal-Mart store since 1973 – it was one of the first to be built outside Wal-Mart’s home state of Arkansas – but a new Supercenter is set to open July 19.

Marshfield Mayor Bob Clark said the Supercenter will add sales tax revenue for the city, but the real advantage will be in the added employment.

“What we need in the city of Marshfield is businesses, both commercial and industrial, to maintain our youth and give them jobs so they don’t have to go elsewhere,” Clark said. “The Supercenter is doubling (Wal-Mart’s Marshfield) employment. They’re not all the highest-priced jobs, but I’ve seen them take several of their employees and make them managers, and they make pretty good money.”

The main difference between a standard Wal-Mart and a Supercenter is the Supercenter’s selection of groceries, including fresh produce, bakery and deli items.

Those offerings can spell trouble for independent grocers such as Summer Fresh Supermarket Inc., which has seven locations in southwest Missouri and its headquarters in Marshfield.

Summer Fresh Director of Operations Brent Brown said he thinks the new store will have an impact on sales at his Marshfield store – but he’s used to it.

“The complexion of the marketplace has changed so much in recent years that the independent retailers – such as ourselves – are faced with competing with a Supercenter in basically every market,” Brown said. “We intend to put our best foot forward with our perishables department, our meat department, produce, bakery/deli – those areas where we feel like we can really make a difference with the customers versus what the Supercenter has to offer.”

Revenue streams

Wal-Mart opened a Supercenter in Ozark in April 2004. City Administrator Collin Quigley said it’s difficult to pinpoint exactly how much new business can be attributed to the new Supercenter, as the city is in the midst of an economic boom.

“We’ve had a lot of growth in the city all over, so sales taxes are up every year and have been for quite some time,” Quigley said. “We have a lot more people living here than we did last year, so all of our businesses are drawing from a much larger pool of people. The Supercenter is one piece of the pie – it’s a big piece, but it’s one piece.”

In 2002, Nixa received $1.02 million in sales tax revenue from the Nixa Supercenter. Nixa City Administrator Brian Bingle declined to discuss the latest sales tax figures for Wal-Mart Supercenter specifically, though he did say overall sales tax revenues are up 12.6 percent through the end of May, compared to the same period in 2005.

In 1998, Nixa was one of the first area communities to get a Supercenter. Bingle said the company’s visibility tends to breed other businesses.

“It generates traffic, and as a result people can locate their stores in general proximity,” Bingle said.

Playing piggyback

While small businesses may dread Wal-Mart’s arrival, some companies see it as an opportunity.

The company has five total locations in Springfield, including four Supercenters, and many area towns in addition to Nixa and Ozark also boast a Wal-Mart presence.

And certain companies seem to spring up wherever the retail behemoth appears.

One such company is women’s clothing retailer Cato, based in Charlotte, N.C. The company has stores next to Wal-Mart in Springfield, Lebanon, Marshfield, Neosho, Nixa, Ozark and Republic.

Kyle Edwards, Cato real estate spokesperson, did not return calls for this story.

The companies that piggyback on Wal-Mart’s visibility and high traffic numbers are part of the reason that towns such as Mount Vernon have pushed so hard to get the retail giant to come to their city.

“I’ve contacted Wal-Mart a few times in Bentonville (Ark.) and provided them with a lot of information,” said Jane Hood, Mount Vernon’s economic development director, adding that the town has been referred to a company site selector who will gather information and present it to the company.

Carrie Thum, Wal-Mart’s Missouri public relations representative, said that the methods Wal-Mart uses to choose store locations are confidential.

Hood attended a September meeting of the International Council of Shopping Centers, where she met Cato’s real estate director.

“I let him know that I was having conversations with Wal-Mart, and he said, ‘The day you know they’re coming to town, call me immediately,’” Hood said.

Hood said she’s aware of the negative effect the “blue box” can have on local businesses, but she said that’s not as much of an issue in Mount Vernon.

“We just did a community survey, and it said that 75 of people in the community purchase clothes and related items outside the city limits,” she said. “There’s no place to buy those things here.”