Small Towns See Wal-Mart as Mixed Blessing
IN Westford, Mass., a medium-sized, semi-rurul community 40 miles northwest of Boston, a battle has been under way since last spring. On one side is a group of residents sporting red T-shirts exclaiming, ``STOP WAL-MART.'' On the other side is the retailing giant from Bentonville, Ark., which is hoping to set up shop.
For now, it looks as though a truce has been called. Wal-Mart announced last week that it was reevaluating the Westford site, along with three other undisclosed Massachusetts locations. A decision about whether to proceed with building plans will be made ``sometime in the future,'' a company spokesman said. Many conflicting voices
Westford may have its victory, but the battle is not unique. While some towns welcome the influx of new jobs, tax revenues, and the low prices Wal-Mart stores provide, many communities worry that the small-town merchant traditions that are important to them will be destroyed.
Elizabeth Michaud, a Westford resident and founder of a 30-member ``Stop Wal-Mart'' committee, ticks off some of the reasons she thinks Wal-Mart should stay out: increased traffic, crime, and environmental degradation. She worries that local merchants would be forced out of business. And she is convinced that a 116,000-square-foot store on approximately 25 acres of land would not be ``harmonious'' with the other buildings around it, as a town bylaw says it must be.
So far, more than 4,000 Westford residents have agreed with Ms. Michaud and signed a petition saying so. ``We've gained tremendous support,'' Michaud says, adding that the group was hoping to gain the signatures of at least 6,500 Westford residents, or half the town's adult population.
Before putting its plans on hold, Wal-Mart, the largest retailer in the United States, had already made some concessions to Westford. The number of buildings planned was scaled back from four to one. The retailer even agreed to station a biologist at the construction site to ensure that migrating tree frogs can get to a breeding pond behind the proposed building.
``This is going above and beyond what most retailers believe is the call of duty,'' says Wal-Mart spokesman Don Shinkle. ``Wal-Mart is asking to be part of the community.... We're not perfect, but we try to be hard-working, viable citizens.''
The retailer has pledged that it will not move into any community that does not want it, Michaud says, and the goal of the ``Stop Wal-Mart'' committee is to get it to keep that promise.
But Mr. Shinkle counters that the company has received calls from town residents who say that a majority actually wants the company to locate there. ``You're not going to get 100 percent of anything,'' he says. ``I've seen a lot of support, people calling to say, `Don't give up.' ''
Wal-Mart's problems in Westford come on the heels of some tough times for the company on Wall Street. Last spring Wal-Mart stock declined about 20 percent as sales growth slipped into the single digits for the first time in several years. ``When Wal-Mart stock plunged ... earnings estimates were coming down,'' says Joseph Ronning, a retail industry analyst for Brown Brothers Harriman Inc., New York. ``The reasons [earnings were down] were a weak economy and zero inflation.''
``But there is considerable room for expansion in the Northeast and California, two relatively new territories,'' Mr. Ronning adds. ``The company is also enlarging the average size of its stores.''
Ronning says he expects Wal-Mart's earnings growth to be in the 21 percent range in the next few years.
Wal-Mart should be accepted as a fact of life, says Kenneth Stone, an Iowa State University economist who has been studying the retailer since the mid-1980s. He conducts 70 or 80 seminars a year around the US and in countries such as Canada and Japan, ``forewarning'' local merchants and town residents about the impact of Wal-Mart.
``You have to accept that [Wal-Mart] is going to be there ... and concentrate on how to tap into the additional business the store will bring,'' Mr. Stone says. Living with Wal-Mart
In a study on the effect of Wal-Mart on 32 Iowa towns over the last five years, Stone found that the local businesses that provided alternative goods and services to Wal-Mart's had higher sales due to a ``spillover'' effect from increased traffic. Merchants with products similar to Wal-Mart's tend to see a reduction in sales.
``Most of the areas I speak in, like the communities I studied in Iowa, have relatively static populations,'' Stone says. ``When a big store like Wal-Mart comes in, it is bound to do significant business. And that business doesn't come out of thin air, it comes out of other retailers' pockets.''
To fight back, Stone says, merchants have to work harder to develop superior service, manage their inventory better, and improve their marketing strategies like extending the number of hours they stay open.
``What happens to small- and medium-sized towns when Wal-Mart moves in ... depends on the actions of the merchants,'' Stone says. ``If it's business-as-usual ... sales will go down.
``If they take a positive attitude, tap into the additional traffic, and promote their own businesses better, then they will probably be able to cope.''