When big brands come to small towns

Bob Estep didn’t know it was supposed to be a secret. But news travels fast in a small town.

The Sparta landowner said he’s met with lawyers representing the interests of megaretailer Wal-Mart Stores Inc. (NYSE: WMT) a handful of times this year, and each time they’ve had something different for him to sign.

“Wal-Mart has not signed papers with me, yet. All they’ve done is say, ‘Would you do such and such with discretion?’ And, ‘How many square feet would you sell?,” Estep said. “Every time it was with a different attorney. And every time, it was with different rules.”

The interest in small-town Sparta is for a new, smaller Wal-Mart store concept.

Estep said he understood the retailer wanted to ensure other parts of his 2.28 acres wouldn’t go to competitors, such as pharmacies, but he hasn’t been inclined to worry about that type of thing.

“I ended up telling them, ‘You can buy the property just like I did.’ I bought it as is, where it is, and that’s it,” said Estep, a local farmer.

He said Wal-Mart representatives verbally agreed to buy it. “But I haven’t seen a penny, so far,” Estep said.

He said word that a small-scale Wal-Mart store might be coming to the town of less than 2,000 people took on a life of its own after a surveyor visited his property on the edge of town. Townsfolk started asking questions.

On May 13, the Sparta Board of Aldermen moved to annex Estep’s land near the industrial park to cash in on the sales tax revenue a Wal-Mart could generate. A public hearing is scheduled June 10.

It’s no secret the retailer is building out its Wal-Mart Express concept designed with pharmacies, general merchandise, groceries and gas stations.

In January, Wal-Mart opened a 3,700-square-foot Express store in Columbia, and on May 2, a 12,000-square-foot store opened in Oriental, N.C. According to Walmart.com, the company operated 20 Express stores companywide in February, when it announced plans to build 270 to 300 small stores in the current fiscal year, doubling the 120 to 150 stores it had forecasted.

Wal-Mart spokeswoman Erica Jones could not confirm the plans in Sparta, but she said the roughly 12,000-square-foot Express stores are designed to be planted in towns within 30 minutes of an existing Wal-Mart store.

“It offers them access to fresh and affordable produce and groceries as well as everyday merchandise like paper products,” Jones said.

She said Missouri’s lone Express store near the University of Missouri is an exception in size and mimics another budding concept called On Campus.

In recent years, Wal-Mart has been developing its roughly 40,000-square-foot Neighborhood Market stores. The retailer has opened four in Springfield since 2012, but plans for a fifth at Grand Street and Campbell Avenue are on hold due to a zoning lawsuit.

Wal-Mart operates about 350 Neighborhood Markets, and officials say the stores posted comparable sales growth of 4 percent in fiscal 2014, ending Jan. 31.

The move to build smaller stores appears to be designed to overcome disappointing overall sales for the company. Sales in the first quarter only increased 0.8 percent.

Brent Hanks, sales manager of Dennis Hanks Chevrolet in Ozark, said he’s been around long enough to see how big brands such as Wal-Mart and Lowe’s Cos. Inc. (NYSE: LOW) have shaped his Christian County town of roughly 18,000. Hanks, a third-generation car salesman in Ozark, said the family business started in the Springfield bedroom community in 1985.

“We don’t know everyone who walks in the door like we used to. And we draw more people from further out,” Hanks said. “Usually, if you ask a few questions though, you know them somehow or someway.”

He said he couldn’t attribute any rise or fall in revenue directly to the home improvement store or Supercenter built on the south side of Ozark around a decade ago, but oftentimes the chains attract others.

“As more businesses come in, they do impact our business,” Hanks said, adding the retail development at Highway F and U.S. Highway 65 might have been the tipping point for an O’Reilly Auto Parts store. “O’Reilly has had an impact because it has bought vehicles from us in the past and made it easier for us to get parts for cars.”  

Sherry Goinn, co-owner of Mama’s Burgers & Such LLC in Sparta, said if Wal-Mart comes to town, it could create both opportunities and problems for the community.  

“I don’t think it would hurt me too badly, but it might hurt the grocery store here. And it might hurt the hardware store,” she said. “When Wal-Mart opened in Ozark, we had a dry goods store here. That shut that down.”

Another possible downside, she said, is that a new Wal-Mart could attract McDonald’s.

“If it comes, then probably other things would come,” Goinn said, adding she won’t lose sleep over whatever happens. “They don’t have what we have. You can’t go in and sit down and have a big burger or pork tenderloin.”

Then again, she said it could mean more business for Mama’s if it keeps Sparta or Chadwick residents closer to home.

“I don’t think they would go to Ozark as much. I know a lot of people go to the Wal-Mart in Ozark,” Goinn said. “I’d love to see one come. It’s hard for me to run up to Ozark and get what I can’t get from the grocery store.”

Town & Country Supermarket is the only full grocer it town, and she welcomes such competition.

“I think competition is good with helping keep prices down,” Goinn said.

Estep said Sparta Mayor Mike Younker could be the primary source for everyone in town knowing his business. Estep said he thinks the mayor got excited and talked up the Wal-Mart possibility.

The landowner would still like to sell the property, but he’s in no rush. This is Sparta, after all, where nothing moves as fast as the gossip about what new business might be coming to town.

“When it happens, it happens,” Estep said.