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Thread: Two Wal-Mart supercenters in one town?

  1. #1

    Two Wal-Mart supercenters in one town?

    Has anyone else had the experience of hosting two Wal-Mart Super Centers in one community?

    I write from Idaho Falls, ID, a community with population 50,000 and with a largely rural trade area of about five times that number sperad over three states ID, WY, MT). Last winter Wal-Mart opened a Super Center, and I mean this is a BIG store, on the east edge of town. This week (9/22/03) the firm announced it would build another Super Center of equal or greater size, plus three stand alone restaurant pads, at the interchange of a state highway and the Interstate highway that bisect the western edge of the city. The distance between the two Super Center sites is less than five miles.

    What is the rationale for this marketing approach? Has anyone else seen this in their community? We've always assumed that Wal-Mart is playing to the regional trade area. This new site suggests the chain is acting like a traditional grocery firm like Albertsons. Typically, grocery stores in our community serve a circular geographic area of 1-2 miles.

    I'd be grateful for information from others who have two Wal-Mart Super Centers in the same town, especially a small one, and how they impacted the local and regional economy. Pointers to formal studies or reports available in electronic form would be appreciated.

    Dan Yurman
    Member, Idaho Falls Planning Commission
    Idaho Falls, ID
    Personal email: djysrv@yahoo.com

    Standard disclaimer included by reference.

  2. #2
    Cyburbian el Guapo's avatar
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    St. Joseph Missouri has two located five miles apart at either end of town. Pop 80K. As to their reasoning in site selection...I guess you would have to ask them.

  3. #3
    Corn Burning Fool giff57's avatar
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    Sioux City also has two (90k) .
    “As soon as public service ceases to be the chief business of the citizens, and they would rather serve with their money than with their persons, the State is not far from its fall”
    Jean-Jacques Rousseau

  4. #4
    Cyburbian Planderella's avatar
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    The area where I reside currently hosts 3 Wal-Mart Super Centers approximately 5-7 miles or a 10 minute drive apart from one another.
    "A witty woman is a treasure, a witty beauty is a power!"

  5. #5
    Cyburbian Cardinal's avatar
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    It does seem counter-intuitive. Wal-Mart's greatest margins are on the hardlines, and the larger part of their superstores is still devoted to these items. With a very extended trade area, the specific store location has less meaning. It is not as if somebody driving fifty miles from the east won't drive another five miles to get to a store on the west side of town. Is there any reason to suspect that they may open the new store and close the old one? For instance, is it impossible to expand the old store? Is the new location a much stronger commercial area?

  6. #6
    Cyburbian Emeritus Chet's avatar
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    Market absorption - they keep other mega box competitors completely shut out of the market.

  7. #7
    Cyburbian donk's avatar
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    I'll second chet's comment and add - they like to either close out an area or be in an area perceived as th eplace to be.

    Moncton has two, one in the new big box / power centre the other in the traditional mall centre. Both are in excess of 100 000 sq feet. Both are insanely busy as destination shopping. The market area there is realistically, PEI, half of NB and half of NS.(Probably 400 000)

    They are building another store nearby in NS, but until NS get sunday shopping the two in Moncton promise to be busy.
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

  8. #8
         
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    have I mentioned that I HATE WALMART

    I don't think any planner can actually say they like walmart. God that place is annoying!!! Up here in Canada, they have grown, but are still fairly restricted in major cities. There was one planned for the City of Vancouver, but the city refused the development permit because of "traffic concerns". Thank-god for small mercies.

    On the other side of the equation, however, is CostCo, which is building an Urban Costco right in the downtown core - as the base to a major condominium development; their primary clinentele will be walk in and not traffic. Suffice to say, I like costco alot more than walmart.

  9. #9
    Cyburbian Cardinal's avatar
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    Re: have I mentioned that I HATE WALMART

    Originally posted by West Coast Canadian
    I don't think any planner can actually say they like walmart....
    ...and so it begins.

    Well, ok, maybe most planners will agree that we don't like Wal-Mart, but some of us are willing to shop there.

  10. #10
    Cyburbian
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    west coast, sorry in advance for jumping on you....I thought about being subtle like Cardinal, but I cannot. So all Planners have to think alike? Might be the dumbest thing said in these forums, ever.

  11. #11
    NIMBY asshatterer Plus Richmond Jake's avatar
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    Originally posted by gkmo62u
    Might be the dumbest thing said in these forums, ever.
    OT: I believe I hold that distinction when I asked if bicycling was a sport.

  12. #12
    Cyburbian Plus Zoning Goddess's avatar
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    We have one on the east side of town, and another under construction on the west side, so no assessment yet about impacts. Our population is only about 30k, but the second store will be fairly close to the upper-income Lake Mary/Heathrow (FL)area.

  13. #13
    Cyburbian jordanb's avatar
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    Originally posted by RichmondJake
    OT: I believe I hold that distinction when I asked if bicycling was a sport.
    Is it?

    (just kidding! )

  14. #14
    maudit anglais
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    [mod hat]

    Rants and other off-topic comments about the evils/benefits of specific large-format retailers should be directed to one of the innumerable threads on the subject in the FAC.

    Thanks

    [/mod hat]

  15. #15
    Cyburbian tsc's avatar
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    1,000,000 people... 1 Wal-Mart... no super center... there is one the next county over though....

    we do have 2 Targets coming into the county this fall.. and I think we have 2 K-Marts...none of them supersized.

    Fortunoff's just opened their largest anchor store though....slightly different than a Wal-Mart...
    "Yeehaw!" is not a foreign policy

    Renovating the '62 Metzendorf
    http://metzendorf.blogspot.com/

  16. #16
    This is a very useful reply (below). Wal_Mart actually had a smaller store in a more central location which they abandoned to build the 1st Supercenter on the East end of town. The advantages of the new site are it fronts on a major arterial and had lots of room for parking plus a link to a second major arterial out the South side of the site. This new site is much closer to other mall type shopping areas.

    The new or 2nd Super Center would be located on a site formerly occupied by the county road & bridge dept. It is NOT a central shopping area. Quite a few of the businesses in the area cater to the easy off/ easy/on Interstate traffic and not to locals. However, this is long haul traffic which starts in Montana at the Canadian border and goes to Salt Lake, Las Vegas, and eventually San Diego. The country north of Idaho Falls on I-15 is public land (open range) and potato farms. There aren't many shoppers. To the south about 30 miles (Blackfoot, pop 10,000) Wal-Mart already has a combination dept/ grocery store that serves a largely agricultural region.

    I'm still scratching my head about the business case for the 2nd store. I think the "market saturation" theory is interesting. Are there other reasons why the firm would plunk down a 2nd Super Center in the same 50,000 population town?

    DY

    QUOTE]Originally posted by Cardinal
    It does seem counter-intuitive. Wal-Mart's greatest margins are on the hardlines, and the larger part of their superstores is still devoted to these items. With a very extended trade area, the specific store location has less meaning. It is not as if somebody driving fifty miles from the east won't drive another five miles to get to a store on the west side of town. Is there any reason to suspect that they may open the new store and close the old one? For instance, is it impossible to expand the old store? Is the new location a much stronger commercial area? [/QUOTE]

  17. #17
    Member Wulf9's avatar
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    Often a major retailer will build new stores to relieve pressure on an overperforming store. So if one store is a super star performer, a retailer often locates another nearby to take the pressure off.

  18. #18
         
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    Originally posted by gkmo62u
    So all Planners have to think alike?
    I don't think I said that all planners had to think alike, but I think most planners recognize some of the inherent faults associated with a big box retail store like WalMart which:

    1. are massive, often sprawling development that often do little to support the local community.

    2. sell cheap, low quality goods, albeit at an inexpensive price - however, some studies have found that the transportation costs associated with getting to some walmarts more than makes up that difference; and

    3. pay its employees at a level that's below the poverty line

    I'm guilty of shopping there, out of necessity when I was a student looking for cheap, snap together furniture. But even then I noticed just how massive, sprawling, impersonal, and well, boring most walmarts are. The other thing I don't like about walmart, as opposed to other big box retails like home depot or costco, is that they don't support smaller businesses. Home depot sells hardware and wood to small contractors at a low price - similarly, Costco provides goods to small businesses at a low price. Walmart doesn't doany of that except sell cheap goods. Take it or leave it, that's how I see it...

  19. #19
    The population in my town is about 60,000 and we have a Walmart on the east end of town and one on the west end (soon), no more than 8 miles apart. People were really pissed about the west end one because it's in a more affluent part of the city. All new development housing and expensive. Walmart has actually chosen really good locations from a business perspective. The East end store is on the border, the exact border of the town to the east that has 150,000 people and no walmart. The west end walmart is on the exact border of a neighboring area with about 75,000 people and no walmart and many more people coming. All of the coastal hills are disappearing to track housing in and around wallmart's new west end location. So they seem to have picked locations very logically. Of course our local planners will build anything anywhere.
    Last edited by The Irish One; 27 Sep 2003 at 10:26 AM.

  20. #20
    I had the same reaction upon learning that Home Depot is planning to move into an old K-Mart location. Since this site is half way between 2 other Home Depots on the same road, my first thought was won't Home Depot pull business away from its other locations. That said, the area is a designated growth area and the new store is replacing a defunct big box store, so that is positive. Besides presumably they have done the market study that says this is a good place for them to be.

    As for planners being pro or anti big box retailers, West Coast Canadian makes some valid points. That said, big boxes are here to stay and its up to us planners and community developers to make them work for the community rather than against it. Besides let's not forget that small local businesses can distinguish themselves from the big boxes through service, selection, and experience. They can also benefit from big boxes if they market to their strengths rather than trying to compete head to head on price and inventory. Some things we can to do to make big boxes work for us are:

    ** Direct big box retailers into locations that are close to central business districts so that main street retailers can benefit from increased traffic.

    ** Work with small retailers on marketing strategies that play up their strengths -- unique products, superior personal services, and unique shopping experiences. (By the way latest survey data on shopping trends show people will go out of their way for these things as price and selection can be obtained over the internet).

    ** Provide incentives to big box retailers to build in or near existing strip malls and big box developments rather then spread them through out the community.

    ** Minimalize parking. Personally this is one of my primary issues with big boxes -- too much damn parking. Have you ever seen a big box parking lot full????

    ** Create walkable spaces between the shopping developments. Another of my irks, in order to go from one plaza to another you have to drive -- even if they are right next to one another -- because of traffic, lack of connecting walkway or driveway, or sidewalks that lead nowhere.

    From my days in community - economic development, I learned that big retailers are here to stay and that's OK if they are planned as part of the community and not allowed to just happen haphazardly.

    Ok, I'll get off my soapbox now.

    CHEERS!

    Kathie

  21. #21
    Cyburbian bocian's avatar
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    The twin cities of Urbana-Champaign.Population 100,000. Two Wal-Mart supercenters 5 miles apart, the third one in the works - approved. What a nighmare!!!

  22. #22
    Cyburbian Cardinal's avatar
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    Kathie - Excellent comments.

  23. #23
    Cyburbian
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    Originally posted by West Coast Canadian
    I don't think I said that all planners had to think alike, but I think most planners recognize some of the inherent faults associated with a big box retail store like WalMart which:

    1. are massive, often sprawling development that often do little to support the local community.

    2. sell cheap, low quality goods, albeit at an inexpensive price - however, some studies have found that the transportation costs associated with getting to some walmarts more than makes up that difference; and
    If there are two Super-Centres being built within five miles of each
    other, the transportation costs can't be that much. If you live halfway
    between them you can have your choice of being at either one with a
    15 minute (or less) bike ride.

    Transportation costs to a Wal-Mart can't be that different than travel to any other store; transportation costs might be even less if a single trip to a Supercenter means no extra trips to other stores--especially relevant if trip-chaining is unattractive (e.g. you're riding a bus with a lousy schedule).

    [B}
    3. pay its employees at a level that's below the poverty line
    [/B]
    Do Wal*Mart wages deviate significantly from other retailers (large or small)? In my area, they pay better than the local discount retailer (Marc's). I'm not trying to defend Wal*Mart's employment practices here; I just don't see much deviation between them and other chain retailers or local retailers (at least in my area).


    I'm guilty of shopping there, out of necessity when I was a student looking for cheap, snap together furniture. But even then I noticed just how massive, sprawling, impersonal, and well, boring most walmarts are. The other thing I don't like about walmart, as opposed to other big box retails like home depot or costco, is that they don't support smaller businesses. Home depot sells hardware and wood to small contractors at a low price - similarly, Costco provides goods to small businesses at a low price. Walmart doesn't doany of that except sell cheap goods. Take it or leave it, that's how I see it...
    Firstly, next time look for an Ikea. Secondly, Wal-Mart's target customer base is not other businesses like Home Depot's may be. They are trying to sell to consumers. Wal-Mart's Sam's Club stores would be more of what you have in mind if you want a retailer that sells cheap stuff to businesses.

  24. #24

    Wal Mart referendum in my town!!!!!!!!

    Well the upper crust citizens of my city have taken on Wal Mart and the passive city council who haven't learned the word or concept NO!

    small article.
    http://www.nctimes.com/articles/2003...0322_35_52.txt

  25. #25
    Cyburbian Rumpy Tunanator's avatar
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    Re: Two Wal-Mart Super Centers in One Town?

    Originally posted by djysrv
    I write from Idaho Falls, ID, a community with population 50,000 and with a largely rural trade area of about five times that number sperad over three states ID, WY, MT). Last winter Wal-Mart opened a Super Center, and I mean this is a BIG store, on the east edge of town. This week (9/22/03) the firm announced it would build another Super Center of equal or greater size, plus three stand alone restaurant pads, at the interchange of a state highway and the Interstate highway that bisect the western edge of the city. The distance between the two Super Center sites is less than five miles.
    Wow, apparently this stores model has never heard of canablism. The 2 stores are going to be feeding off each other, as well as the other stores still standing.
    A guy once told me, "Do not have any attachments, do not have anything in your life you are not willing to walk out on in 30 seconds flat if you spot the heat around the corner."


    Neil McCauley (Robert DeNiro): Heat 1995

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