Wednesday, April 05, 2006

Some thoughts on Wal-Mart and small towns

For a long time, my major beef with Wal-Mart has always been the physical design that their stores take. In my opinion, most of them are built in areas where suburban growth is the only kind of growth that can follow, and they're built the same way, irregardless of site or locale. They are built only to serve the needs of the automobile, mostly ignoring anyone who might take transit or walk/bike to one of their stores. My complaints with Wal-Mart mostly have steered clear of healthcare, immigrant labor, labor conditions, and the like. I'll leave that to the WakeUpWal-Mart folks.

I've long thought that downsized Wal-Marts placed in dense downtown areas would be great, and hoped that the WM real estate folks would latch onto that and at least think about doing something other than the brainless design of finding a big plot of land next to a busy arterial road, and building a 200,000 sf Supercenter.

A blog that I read regularly (Rebuilding Space) has helped to change my mind about this thinking. He writes in this recent post:

The problem with Wal-Mart isn't so much that it is a behemoth store. The problem is their business model, which appears to be designed to capture as much as 100% of the average customer's retail expenditure dollars. That doesn't leave much room, even crumbs, for other businesses.

This is the reason why I think urban Wal-Marts or Wal-Marts in the Main Street business model could be a bad idea. The Main Street business model is one built on small, locally owned businesses in a mixed-use area like downtown Bentonville. The idea is that everything supports each other. The downtown restaurants and gathering places act as third places to bring everyone together (kind of like the Bentonville Square or Fayetteville's Dickson Street), the retail offerings each give you a slice of something you're looking for, causing you to have to walk around the area and patronize other businesses.

image from

However, Wal-Mart's business is built on reducing your shopping trips into one big trip to their Supercenter. Where you can buy dog food, people food, car tires, toys, recreational products, new glasses, prescriptions, tax services, and everything else under the sun. The success of Wal-Mart's business model is dependent on shoppers coming to their store, buying everything they need, and going home without patronizing nearby business.

The "Rebuilding Space" blog comments on the difference between Wal-Mart and the downtown department stores of old in this post:
I figured out why Walmart and similar stores have a different impact on the surrounding commercial district compared to department stores. While department stores expected to dominate sales in the commercial district, they didn't expect to win every customer and take all the transactions.

On the other hand, category killer big boxes and price killer big boxes like Walmart function much differently than how the department stores did. Such stores don't build up the entire business district. They are more comparable to corn bred genetically to withstand frequent applications of Roundup pesticide... nothing survives but the specially genetically bred Roundup ready corn, or the 225,000 sf. Walmart Supercenter.

Such stores attract customers and intend for their customers to spend all their money only within the store, which after they finish transacting their business, the customer leaves to return home, not to spend another dime in the adjacent commercial district.

Now I'm not so foolish to think that we certainly don't want to have to make 47 trips to get the daily things we need. I can go to Wal-Mart and often kill 5 birds with one stone. But in a downtown or Main Street-type area, just going to one place isn't the idea, nor it is necessary. I think that the Wal-Mart way of shopping (everything at once) is attractive to people because they live in places where their life and time are dominated by traffic and the car. It makes sense to want to cut down on trips when everything is a 15-30 minute drive.

But when you live near a downtown, small to medium-sized city, or Main Street-type area, then you probably don't need to reduce all your shopping to one trip. And that's my only point....I think Wal-Mart's in medium to small-sized urban areas is a bad idea. However, I think that bigger cities have enough diversity of shoppers, competition and culture for competing businesses to survive if there was a Wal-Mart there.

I will say this: Wal-Mart is pledging to build 50 stores in blighted urban environments, even saying that they're going try and help nearby small businesses succeed to help the neighborhoods. You can read more in this AP article.

Anyway. Enough heaviness for tonight. I'm going back to the Braves game now. Thank goodness that the first 6-7 games are on TBS. Gives me another week to come up with the 80 bucks to buy MLB.TV.....

read more: wal-mart, main street